Bank of Lithuania
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In the first quarter of 2020, the number of participants and payment transactions as well as income of the electronic money and payment institutions (EMIs/PIs) sector continued to grow at a rapid pace. However, not all institutions have learnt the lesson of the necessity of holding sufficient capital buffers.

“The first quarter trends have shown that the EMI/PI sector is developing in leaps and bounds. On the other hand, the COVID-19 outbreak has caused tremendous uncertainty and we will be able to assess its impact in the next quarter. As the sector is constantly growing, we always emphasise the importance of compliance with key supervisory requirements. However, market participant are not always willing to learn from their peers’ mistakes,” – said Rūta Merkevičiūtė, Head of the Electronic Money and Payment Institutions Supervision Division at the Bank of Lithuania.

At the end of the first quarter of 2020, the public list of electronic money and payment institutions included 117 licensed entities. Lithuania remains the leader in continental Europe in terms of licensed EMIs and PIs, and the interest in the country is still not fading – the Bank of Lithuania usually has to examine 40–50 licensing applications (currently – 33 EMI 13 PI applications).

In the first quarter of 2020, the total amount of payment transactions executed by EMIs and PIs stood at €19.2 billion. On a year-on-year basis, this amount grew 1.8 times and firms received €23.6 million in income from licensed activities – an increase of €7.1 million (1.4 times) compared to the first quarter of 2019. 73% of income was generated by EMIs and the remaining 27% – by PIs. 

The Bank of Lithuania is devoting particular attention to monitoring the sector’s compliance with the requirements for anti-money laundering, own funds and safeguarding customer funds. Since the beginning of 2020, the Bank of Lithuania has revoked 2 licences, imposed 5 fines, issued 1 warning and made 1 public announcement on violations of legal acts. 

Although the Bank of Lithuania constantly notes that EMIs and PIs must always meet the own funds requirements with a margin, the financial results for the first quarter of 2020 show that 9 out of 117 institutions failed to comply with the minimum requirements. Most of them have already taken steps to ensure a sufficient amount of own funds by accumulating capital buffers and taking decisions to increase their authorised capital.

On a regular basis, the Bank of Lithuania publishes and updates information on annual and key performance indicators of each EMI and PI as well as on their compliance with prudential requirements.