At the end of 2017, seeking to strengthen the dialogue among payment service providers, payment service users, regulators and the academia in the course of developing Lithuania’s payments market, the Bank of Lithuania and the Ministry of Finance created the Payments Council, an independent forum established in light of market support expressed during the public consultation on the National Payments Strategy.
The Payments Council was created drawing on the best practices of other countries. Based on the principle of balanced representation, it consists of 10 members: representatives of payment service providers, enterprises and residents, state institutions formulating and implementing payments policies and the academia. The Payments Council brings together representatives from the Bank of Lithuania, the Ministry of Finance of the Republic of Lithuania, the Association of Lithuanian Banks, the Association of Payment and Electronic Money Institutions, Fintech Lithuania group, the Alliance of Lithuanian Consumer Organisations, the Council of Small- and Medium-Sized Enterprises, the Association of Lithuanian Chambers of Commerce, Industry and Crafts, and Vytautas Magnus University. Representatives of Mykolas Romeris University, Kaunas University of Technology, Electronic Money Association and FINTECH HUB LT participate as observers.
Members of the Payments Council freely choose issues to be discussed during the meetings and prepare their work programmes. The Council aims to assess directions for the development of Lithuania’s payments market, problematic aspects, monitor how payments policy measures are being implemented and how innovations emerging in the market are applied. The Payments Council may submit proposals to market participants and state institutions with regard to possible solutions for issues in the payments market, implementation of policy measures and development directions, formulate the common position of Lithuania’s payments market participants and present it to relevant EU institutions.
Payments Council 2018
In 2018 the Payments Council analysed three priority issues and prepared the following recommendations for payment market participants, payment policymakers and policy implementing institutions:
- Integration of instant payments in business and public administration processes (feasibility study).
- Opportunities for optimising know your customer (KYC) process (feasibility study).
- Analysis of opportunities for new identification means and their compliance with anti-money laundering (feasibility study).
Recommendations are intended for making instant payments more popular, optimising KYC data collection process and creating conditions for innovative remote identification means to appear in Lithuania. The Payments Council determined market inefficiencies and suggested how to improve them:
- one stop shop principle, when the necessary data is requested from government registers and not from the client, is recommended for the KYC process;
- with the aim to expand instant payment service, the Council offers focusing on interoperability of services; to this end, it determined the areas in which equal principles should be applied;
- seeking to improve remote identification process, the Council offers changing the legislation so as to facilitate developing and offering on the market new and safe identification methods.
These changes will first of all benefit to the service users, i.e. natural persons and companies. Using financial services, especially remotely, would become easier, more payment service alternatives would emerge, and users would be required to provide less information to financial institutions. Furthermore, process optimisation would make financial institution service provision more efficient, making it easier to ensure the security of payment transactions and prevent money laundering and terrorism financing; this, in turn, would increase competition.
Payments Council 2019
In 2019 the Payments Council will analyse:
- creation of measures fostering open ecosystem for non-cash payments in education institutions.
- development of Open Banking.
The rights and obligations of the Payments Council, work organisation as well as publication of position and documents are set in the Payments Council Regulations. The Regulations of the Council and structure thereof are to be reviewed at the end of 2019. Contact the Payments Council at: [email protected].