Below we look at some of the key themes as part of a licencing application for the electronic money institution in Lithuania with the Bank of Lithuania. From experience, these areas can affect how fast or slow your application is assessed and addressing them early on will enable a smoother process with the regulator.
1. Meeting regulatory conditions
Your consultant should advise you on all the regulatory conditions for obtaining the payment institution licence in Lithuania. This includes having a local physical presence, including a physical office and local members of staff. You will also be subjected to an initial capital – the exact amount being €350,000.
2. Suitable business plan
You must ensure that the type of e-money you wish to provide fits the definition of electronic money. As per Article 2(2) of Directive 2009/110/EC, “e-money” means “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transaction, and which is accepted by a natural or legal person other than the electronic money issuer”. Prepaid cards and electronic wallets are examples of electronic money.
3. Strong internal controls and systems
You must ensure that you can demonstrate to the Bank of Lithuania that your company has adequate systems and controls to effectively manage your risk and compliance. Systems and controls can consist of both technology systems and compliance experts. You will need to demonstrate that you have adequate controls to manage the risks of money laundering and terrorist funding.
4. Safeguarding client funds
You will be required to safeguard your client's funds. This can be done by either taking out a suitable insurance policy or a client bank account to segregate the client funds. This is a specialist service which very banks offer. We can advise firms on suitable banks to meet the regulatory requirements.
5. Suitable people
The key people in your business, including the shareholders and those responsible for the day-to-day running of the business e.g. head of compliance and CEO, must be fit and proper as well as suitably experienced. Key people such as your AML officer, compliance officer and the CEO, will be assessed individually by the regulator on their suitability.
How Matis can help
Based in Lithuania, Matis is a leading payment and e-money consulting firm. We enable businesses to provide payments such as issuing debit cards and processing payments and issuing e-money, such as prepaid cards and electronic wallets. Our services are delivered and led by a team of experts, who are passionate and care about the work they do.
In order to provide payment services or electronic money in Lithuania, such as enabling retail merchants to accept card payments, enabling individuals to transfer money to others, offering payment banking accounts, debit cards, prepaid cards and e-wallets, you must obtain either a payment institution licence or an electronic money institution licence. We manage the end-to-end process of setting up, including licencing, compliance, systems and operational setup. For more information, visit our website at www.matis.lt or send an email to firstname.lastname@example.org to discuss this further.