Capital requirement for a payment institution
- When the payment institution only provides money transfer services, not less than 20,000 euros is required.
- A minimum of 50,000 euros is required if only payment initiating services are being offered by the payment institution.
- Payment institutions must provide the following services with a minimum of €125,000:
- Cash deposits, as well as all transactions associated with a payment account, are available through these services.
- The payment account can be used to withdraw cash and to conduct all transaction requirements.
- Transfers of cash to the Payment Account as part of payment transactions.
- A payment transaction for which the user has a credit line.
- Payment instrument issuance and/or transaction purchase.
Payment institution license application process
Payment institutions are required to apply for a license before submitting an application to the Bank of Lithuania. Please contact Company in Lithuania UAB as soon as possible if you are interested in obtaining a license from a payment institution so that we can help you define the financial services you should be licensed for. In this way, our clients gain a better understanding of the licensing process, the requirements of the Bank of Lithuania, as well as all other important aspects related to licensing.
Applicants go through the following stages:
- A license application was submitted to the Bank of Lithuania’s Supervisory Service. If no deficiencies exist, the Oversight Service accepts the application if all the necessary documents are provided within five working days.
- A license will be issued within three months if the application and attached documents do not contain any defects.
- Granting or refusing a license. Bank of Lithuania’s Board analyses the submitted documents after they have been evaluated.
Upon reviewing the information, the Supervision Service decides whether to issue a licence or not.
Period for submitting license applications for payment institutions
According to the Law on Payments of the Republic of Lithuania, payment agencies that provide only account information services must process license applications within three months of receiving complete documentation.
We met for the first time with a representative of the Lithuanian Bank
In view of the fact that the representatives of the applicant company may not always be able to understand the legal acts governing the EMI licence application process, the Bank of Lithuania recommends that applicants for an EMI license apply to the Bank of Lithuania as soon as possible, and Company in Lithuania UAB will be happy to assist. Companies wishing to apply for authorization will receive more detailed information from representatives of the Bank of Lithuania.
In order to determine the type of license that is required for the project and to find out what financial services are to be provided under the project, the company must first meet with representatives of the Bank of Lithuania in order to answer all questions of interest that may arise during the application preparation. In such meetings, at least two representatives from the Bank of Lithuania’s Supervisory Service usually attend, but it may be necessary to bring in technical specialists who can evaluate the applicant’s platform or website.
Following are some topics the Bank of Lithuania plans to discuss during the preliminary meeting:
- Company information
- Payout institution’s shareholder, beneficiary, and investor data, by country of residence
- Legal entity data related to the applicant
- Ownership information of the company
- Company’s business plan
- Describe the project’s stage
- The application will include detailed information about the products/services, target markets, pricing policies, and related regulations
- The payment institution’s sources of financing
- Personnel numbers expected
Before the first meeting with the Bank of Lithuania, the above information must be presented.
Licence fees of the money institution
To apply for a license of a payment agency, you must pay 898 euros to the State Tax Inspectorate’s account.
Basic claims on the payment institution
As an active payment institution, The Bank of Lithuania requires detailed data to be provided already at the time of initial circulation, since the establishment of a payment institution must meet all the requirements laid down at the time of approval. Nevertheless, the following points should be taken into consideration when assessing the applicant company:
- Documents submitted to payment organizations must comply with the legal acts regulating their activities; truthful information set forth in legal acts must be submitted.
- The payment institution must comply with its statutory capital requirements: Taking into account the services provided, the minimum capital payable by the payment institution must be at least 20,000, 50,000, or 125,000 euros, according to the Law on Payment Institutions of the Republic of Lithuania. Payment organizations must not make payments exceeding €3,000,000 per month.
- Having a significant stake in the payment institution’s authorized capital and / or the right to vote, making sure the payment institution and its shareholders or beneficiaries are suitable and appropriate. It is important to have a good reputation, ensure financial viability of the project, and ensure reliable and prudent management.
- Director qualification and experience: the directors must be able to carry out their duties with the required qualifications and experience, as well as an impeccable business reputation.
- It is important that the business planning provided by the prospective payment institution corresponds to the capacity of the institution’s founders (shareholders or beneficiaries) to implement it.
A payment institution’s activities must be insured.
The company applying for a licence must also provide a detailed business plan that reflects the activities of the payment institution in order to ensure the sound and prudent management of the payment institution. In addition, it is crucial that the company has a document describing its structure, such as divisions of labor and clear roles and responsibilities, a customer identification system, a risk monitoring document, as well as rules of internal control.
Evaluation of submissions
Primary documents are verified and evaluated by Bank of Lithuania Supervisory Service specialists as part of the provision process. Their conclusions on authorization are based on a common understanding. During the evaluation process, the following processes are carried out:
- The applicant firm should be kept in regular communication and be able to meet (if necessary).
- Payment institutions are responsible for rectifying deficiencies identified by the Oversight Service.
Depending on the amount of services the applicant company plans to provide, the examination of the documents will take a certain amount of time. Applicants for a license of a payment agency can be evaluated more quickly if fewer documents are provided and applications are not submitted for all services that can be provided by the agency.
Currently, 277 companies have successfully obtained the Payment Institution in Lithuania license
Company in Lithuania UAB can help your company obtain a financial license in Lithuania, necessary for providing Payment institution services, and is ready to accompany your company at all stages of application. Contact us and ask your questions today.