Number of electronic money and payment institutions as well as their income rates continued to rise
At the end of 2019, a total of 115 electronic money (EMI) and payment (PI) institutions operated in Lithuania – their number over the year grew by a fifth. Corporate income from licensed activities (according to unaudited data) increased 1.7 times – from €41.08 million to €68.6 million.
“With the rapidly evolving market, we strive for Lithuania’s licensed EMIs/PIs to be associated with high compliance standards. This is why enforcement of anti-money laundering, capital ratio and customer fund protection requirements are the key areas of supervision,” said Rūta Merkevičiūtė, Head of the Electronic Money and Payment Institutions Supervision Division of the Bank of Lithuania.
67 EMIs and 48 MIs operated in Lithuania at the end of 2019. In terms of licensed EMIs, the country was ranked first in continental Europe.
According to Ms Merkevičiūtė, Lithuania’s jurisdiction has already gained good reputation and thus there is a number of institutions interested in obtaining a licence in the country. However, the supervisory bar is also set high, thus the examination of licensing applications is an ongoing process at the Bank of Lithuania. Last year, the Bank of Lithuania received over 80 applications from interested institutions, yet more than 30 of them were rejected in the preliminary stage due to lack of data, or their examination was terminated after the submission of notes by the Bank of Lithuania.
Number of EMIs/PIs and their income
In 2019, the payment transactions made by EMIs/PIs amounted to 16.5 billion, while companies earned €68.6 million from licensed activities: 66% of this income was generated by EMIs, while 34% – by PIs. Ten largest institutions earned 59.4% of the sector’s total income from their licensed activities. Over the year, the number of companies that had not yet earned any income from licensed activities has dropped: in 2019, the share of such institutions stood at 26% (in 2018 – 33.7%).
In 2019, within its supervisory mandate, the Bank of Lithuania paid most attention to compliance with anti-money laundering, own capital and customer fund protection requirements. Due to irregularities detected in these areas, the Bank of Lithuania revoked one licence, removed the head of one institution, imposed six fines and issued two public notices on violations of legislation. The priorities in the supervisory field this year remain unchanged. At the same time, the Bank of Lithuania focuses on examining whether EMIs and PIs provide services within the confines of their licences – in early-2020, the central bank decided to revoke the payment institution licence for restricted activity granted to one payment institution for the provision of unlicensed services.
The key annual and quarterly performance indicators of EMIs and PIs as well as information on their compliance with prudential requirements are available on the Bank of Lithuania website. EMI and PI performance indicators will be updated and published along with the sector review by 1 July 2020, having conducted the annual financial report audit of EMIs and PIs (where it is mandatory) and approved the annual financial reports.