Electronic Money Institution (EMI) Lithuania

Enabling you to gain access to 512 million consumers across Europe and offer electronic money, including electronic wallets and prepaid cards

INTRODUCTION

The Bank of Lithuania is the Lithuanian financial services regulator. It supervises firm ranging from payment service providers, credit institutions, electronic money institutions, consumer credit firms, insurance providers and investment firms.

Electronic money or e-money is the digital equivalent of cash and can be software or hardware-based. Card-based e-money is commonly stored on a prepaid card, an electronic purse or wallet. Similarly, it may also be stored in a payment account. The legal framework for electronic money was established by Directive 2000/46/EC. More recently, Electronic Money Directive 2 or EMD2 was adopted in an attempt to modernise the framework for the issuance of electronic money and enable innovation in doing so.

In 2017, mobile payments and digital wallets were used by 68% of Europeans. 84% of consumers across Europe are active online users and this is set to grow. Research has shown that 63% of consumers are most likely to use wallets for loyalty programs, whilst 56% for cashless payments. It is estimated that European mobile payments will almost triple by 2021 and grow from €52 billion to €148 billion.

Get in touch

Please provide your details below or alternatively, email us at info@matis.lt

HOW WE CAN HELP YOU ESTABLISH YOUR BUSINESS IN LITHUANIA

Licencing (Authorisation)

Full compliance support

End-to-end electronic money institution (EMI) licence application preparation. Full management of communication with the regulator until your licence has been issued.

We focus on your compliance so you can focus on your business and its growth. We offer 2 levels of compliance support packages to support you in areas including risk, compliance and auditing.

Obtaining banking facilities

From helping you obtain operational banking facilities to issuing cards and virtual IBANs, our service has your customer's needs in mind.

Full consulting support

Our partnership with you extends to consulting services, including legal, accounting, recruitment, business development, product development and market strategy.

OUR EMI LICENCING PROCESS. STEP BY STEP

Application Approval & Licence is issued

We hear back from the regulator who may have further questions. We prepare the response and manage communication on your behalf. Your application is approved and licence issued.

Application preparation

We work closely with you in understanding your organisation and its processes. We project manage your application. Finally, we help you to submit your application.

Planning & Execution

We advise you on business requirements and agree a course of action. We advise you on your regulatory requirements, fees and time-scales involved. We also offer a fast-track service.

Assessment & Suitability

We listen to you to understand your business, your customers and your requirements.

Step 1

Step 2

Step 3

Step 4

OUR APPROACH

Our service extends beyond licencing and compliance. We spend significant time understanding our clients, their culture, ambitions and roadmap. We understand where they are and where they want to be and achieve. We help them achieve this transition. In addition to our above services, we help our clients with related and third-party services, to enable them to offer payment services smoothly.

With our electronic money institution (EMI) licence authorisation service, we will discuss your requirements and the payment services you wish to offer. We will assess your business model, directors and senior management team, their experience and suitability as well as your governance (risk & compliance), operations, structure, business model and viability, to ensure that you will meet the regulator's requirements. Following our assessment, we will provide you with a realistic and honest assessment of application strength, as well as make our recommendations.

The electronic money institution (EMI) application requires careful planning and in-depth preparation. A large number of documents are required to be drafted for the electronic money institution (EMI) application, including a business plan, a programme of operations, risk and compliance policy and framework, security procedures and policies, anti-money laundering etc. We are able to help you prepare all the required policies, procedures, and documents to ensure you achieve authorisation and avoid any delays in doing so.

EXAMPLES OF E-MONEY YOU CAN OFFER

Electronic Wallet

enabling customers to store both fiat (£,$,EUR) and digital/cryptocurrency

Prepaid Card

enabling users to top-up electronic money and use their cards

Payment & Account Initiation

Merchant acquiring

Payment processing

Money remittance

Payment accounts

Under an EMI licence, you can also apply for payment services (as below) rather than applying for two separate licences

A fully managed end-to-end solution

EMI/E-money Licence

Company Formation

Safeguarding bank account

Electronic Money Institution licence process in Lithuania

Services provided by an E-money licence holder (Electronic Money Institution) in Lithuania

An Electronic Money Institution / E-money licence holder in Lithuania enables the licence holder to offer a number of services:

- Issuing of electronic money e.g. prepaid cards and electronic wallets.
- services enabling cash to be placed on a payment account and all the operations required for operating a payment account;
- services enabling cash withdrawals from a payment account and all of the operations required for operating a payment account;
- the execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, including, execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device; execution of credit transfers, including standing orders;
- the execution of payment transactions where the funds are covered by a credit line for a payment service user, including, execution of direct debits, including one-off direct debits; execution of payment transactions through a payment card or a similar device; (iii)execution of credit transfers, including standing orders;
- issuing payment instruments or acquiring payment transactions;
- money remittance;
- payment initiation services;
- account information services.

Lithuania E-money Licence Application Fee

The application fee for the E-money licence in Lithuania is EUR 1,463. The fee is paid when you submit your licence application online.

Legal framework and legislation for E-money licence holders in Lithuania

- Republic of Lithuania Law on Financial Institutions
- Republic of Lithuania Law on Companies
- Republic of Lithuania Law on Electronic Money Institutions
- Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing
- Law of the Republic of Lithuania on Payments
- Resolution No 246 of the Board of the Bank of Lithuania of 30 December 2009 on the Regulations on Keeping the Public Register of Payment Institutions
- Resolution No 03-181 of the Board of the Bank of Lithuania of 14 November 2013 on approval of the Guidelines on the Assessment of Members of the Management Body and Key Function Holders of the Financial Market Participants Supervised by the Bank of Lithuania

Definition of E-money (electronic money institution) under the E-money licence in Lithuania

Electronic money or E-money is the digital equivalent of cash and can be software or hardware-based. Card-based E-money is commonly stored on a prepaid card, an electronic purse or a wallet. Similarly, it may also be stored in a payment account. The legal framework for electronic money was established by Directive 2000/46/EC. More recently, Electronic Money Directive 2 or EMD2 was adopted to modernise the framework for the issuance of electronic money and enable innovation in doing so.

E-money (electronic money institution) regulator

The Bank of Lithuania is the Lithuanian financial services regulator. It supervises firms ranging from payment service providers, credit institutions, electronic money institutions, consumer credit firms, insurance providers and investment firms.

List of key advantages of the E-money licence in Lithuania

The Lithuanian financial regulator, namely, the Bank of Lithuania, is a friendly and supportive regulator. Some key advantages include:

- A newcomer programme for firms looking to set up their fintech in Lithuania.
- A smooth licencing process – 3 months for electronic money or payment institution licences.
- Remote KYC for customer onboarding whilst relaxing on financial penalties for start-ups – for example, no regulatory fines or penalties in the first year of operation.
- Access SEPA and CENTROlink – a payment system developed and operated by the Bank of Lithuania.

List of key features of the E-money licence in Lithuania

- A licence issued in Lithuania is recognised in all other EEA (European Economic Area) member states. Through ‘passporting’, this enables the electronic money institution to operate across all EEA countries with a single licence.
- Issue e-money, such as prepaid cards, electronic wallets and payment account with IBAN codes, across Europe.
- Obtain the electronic money institution ((e-money) licence in as little as 3 months.
- The option to make use of a regulatory sandbox to test your business idea.
- Join payment schemes such as SEPA.
- Remote account opening for individual and business customers.
- Issue Visa or Mastercard payment cards for both individual and business users.

The regulations for E-money institutions in Lithuania

The Payment Service Directive 2 or PSD2 for short, is an EU Directive (Directive 2015/2366) that sets requirements for businesses wishing to provide payment services. It applies to banks, building societies, payment institutions, e-money institutions and their customers.

The PSD2 directive aims to promote innovation within the payments sector and improve protection for consumers, whilst making payments both safer and more secure. The PSD2 directive came into force on 13 January 2018.

Key requirements for the E-money licence in Lithuania

- A minimum capital requirement of €350,000 is required to establish an E-money (Electronic Money Institution) licence.
- The requirement to safeguard client funds either with a segregated client bank account or with an insurance policy.
- The management body of the electronic money institution must be of good repute and possess the relevant qualifications and experience to perform their duties.

Document required for the E-money licence in Lithuania application

As part of an e-money (electronic money institution) licence application in Lithuania, you will be required to provide the following information as part of your application:

- company identification details
- programme of operations
- business plan and financial forecasts
- a description of your business’s organisation structure
- evidence of your initial capital
- measures to safeguard the funds of your users
- compliance & governance arrangements and internal controls
- procedure for monitoring, handling, and following up on security incidents and security-related customer complaints
- processes for filing, monitoring, tracking and restricting access to sensitive payment data
- business continuity measures
- the principles and definitions applicable to the collection of statistical data on performance, transaction and fraud
- security policy
- internal control mechanisms to comply with obligations in relation to money laundering and terrorist financing (AML/CTF obligations)
- details of your qualifying holdings (shareholders)
- details of any outsourcing arrangements

Ongoing capital requirement for the E-money licence in Lithuania

The ongoing capital required for an E-money licence in Lithuania is calculated at 2% of the outstanding electronic money issued.

Timeframe to obtain the E-money licence in Lithuania

The Bank of Lithuania is required by the European Banking Authority to assess and make a decision on an E-money / Electronic Money Institution licence application within three months of receiving a complete application. In reality, it takes, on average, around 6 months for an application to be assessed and a decision to be made.

Payment System, E-wallets & apps

Visa/MastercardCard Issuing

LITHUANIA EMI APPLICATION OVERVIEW

Key information to be included in a Lithuania electronic money institution licence application for authorisation:

1. A programme of operations.

2. A business plan including a forecast budget calculation for the first three financial years.

3. Evidence that you hold initial capital.

4. A description of the measures taken for safeguarding electronic money service users’ funds.

5. A description of the governance arrangements and internal control mechanisms, including risk management and accounting procedures.

6. A description of the procedure for monitoring, handling and following up security incidents and security-related customer complaints, including an incidents reporting mechanism which takes account of the notification obligations.

7. A description of the process for filing, monitoring, tracking and restricting access to sensitive payment data.

8. A description of the business continuity arrangements, including clear identification of the critical operations, effective contingency plans, and a procedure for regular testing and reviewing of the adequacy and efficiency of such plans.

9. A description of the principles and definitions used in collecting statistical data on performance, transactions and fraud.

10. A security policy.

11. A money laundering and countering terrorism financing policy.

12. A description of the structural organisation, including, agents, branches, and outsourcing.

13. Details of shareholders and their qualifying holding.

14. Details of directors and persons who are or will be responsible for the management of the company.

15. The legal structure of the company.

16. The address of the head office of the applicant.