Capital requirement for a payment institution
- Not less than 20,000 euros if the payment institution intends to provide only money transfer services.
- Not less than 50,000 euros if the payment institution intends to provide only the services for initiating payments.
- Not less than €125,000 if the payment institution intends to provide the following services:
- Services that allow cash to be deposited in a payment account, as well as all transactions required to deal with a payment account.
- Cash withdrawal services from the payment account as well as all transactions required for the payment account.
- Payment transactions, including cash transfers to Payment Account.
- Payment transactions where funds are covered by a credit line for the user of payment services.
- Issuance of payment instruments and / or purchase of payment transactions.
Payment institution license application process
The approach of the Bank of Lithuania to the process of application for a license for payment institutions is open and starts long before the application itself is submitted. Company in Lithuania UAB encourages all applicants who are interested in obtaining a license from a payment institution to contact us as soon as possible so that we can discuss their planning process and help define the financial services that should be licensed. This enables our clients to understand the licensing process, the requirements of the Bank of Lithuania, and all other important aspects that may affect the licensing process.
The main stages of application
- Application for the license to the Supervisory Service of the Bank of Lithuania. The Oversight Service verifies, within five working days, whether all the necessary documents have been provided and, if there are no deficiencies, accepts the application.
- Evaluation of the license application and attached documents: if there is no defect in the submitted documents, the license will be issued within three months.
- License or refusal to grant a license. Upon completion of the evaluation of the submitted documents, the Board of the Bank of Lithuania analyses the submitted documents.
The Supervision Service consolidates the information and decides whether to issue a licence or to refuse to issue one.
Payment institution license application period
Republic of Lithuania Law on Payments provides that an application for a license from a payment agency providing only an account information service must be processed within 3 months of the submission of a complete set of documents.
First meeting with the Bank of Lithuania
The Bank of Lithuania, bearing in mind that the legal acts regulating the EMI licence application process may not always be understood by the representatives of the applicant company, We recommend that the EMI license applicants apply to the Bank of Lithuania at an early stage and Company in Lithuania UAB will be glad to help you in this. Representatives of the Bank of Lithuania will provide more detailed information on the authorization process and requirements for the applicant companies.
The purpose of the initial meeting with the representatives of the Bank of Lithuania is to answer all questions of interest that may arise during the preparation of the application, To find out what financial services are to be provided under the project and to determine the type of licence the company is required to apply for. At least two specialists of the Supervisory Service of the Bank of Lithuania are usually present at such meetings, but technical specialists capable of evaluating the platform/website of the applicant company may also be required.
During the preliminary meeting, the Bank of Lithuania seeks to discuss the following:
- Data of the applicant company
- Data of the shareholders, beneficiaries and investors of the payment institution, by country of residence
- Data of legal entities linked to the applicant
- Data of the company’s owner
- business plan of the applicant company
- Description of the stage of the project
- Detailed information on the products/services, target markets, price policies and related regulated actions on which the application will be based
- Sources of financing of the payment institution
- Expected number of personnel
The above information must be provided in the form of a presentation before the first meeting with the Bank of Lithuania.
Licence fees of the money institution
A fee of 898 euros must be paid to the account of the State Tax Inspectorate before applying for the license of the payment agency.
Basic claims on the payment institution
Bearing in mind that, at the time of authorization, the establishment of a payment institution must be prepared to meet all the requirements laid down for it, as an active payment institution, The Bank of Lithuania requires that detailed data be provided already at the time of initial circulation. Nevertheless, in assessing the applicant company, we would like to draw attention to the following points:
- Submitted documents must comply with the requirements of the legal acts regulating the activities of payment organizations; all truthful data established by legal acts must be provided.
- Compliance with the statutory capital requirements of the payment institution: in accordance with the provisions of the Republic of Lithuania Law on Payment Institutions, the minimum capital paid by the payment institution, taking into account the services provided, must be not less than 20,000 euros, 50,000 euros or 125,000 euros, respectively, depending on the services provided. It should be noted that the amount of payments made by payment organizations should not exceed €3,000,000 per month.
- The suitability and appropriateness of the payment institution and its shareholders or beneficiaries, having a significant stake in the authorized capital of the payment institution and / or the right to vote, to be able to ensure the reliable and prudent management of the payment institution, have a good reputation and ensure the financial viability of the project.
- Suitability and integrity of the directors of the money institution: the directors of the money institution must have an impeccable business reputation and possess the qualifications and experience necessary for the proper performance of their duties.
- The business plan provided must correspond to the capacity of the institution’s founders (shareholders or beneficiaries) to implement it, while the prospective payment institution must be ready to provide financial services at the time of the application.
The activities of payment institutions must be insured.
It should also be noted that, in view of the need to ensure the sound and prudent management of the payment institution, the company applying for a licence must have a detailed business plan corresponding to the activities of the payment institution. The company should also have a document describing its structure – with a division of labour and clearly defined liability, a customer identification system, a risk monitoring document, the rules of internal control of the company, including the accounting system.
Evaluation of submissions
The process of providing primary documents includes their verification and evaluation by specialists of the Supervisory Service of the Bank of Lithuania. They provide a common view and conclusions on authorization. The following processes are also performed during the evaluation period:
- Regular communication and meetings with the applicant firm (if necessary).
- Comments from the Oversight Service to the effect that it is the responsibility of the payment institution to rectify the identified deficiencies.
The duration of the examination of the documents depends on the amount of services that the applicant company plans to provide. If an application for a license of a payment agency is not requested for all services that can be provided under the license of a payment agency and fewer documents are provided, their evaluation can be done more quickly.
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.