Electronic Money and Payment Institutions Shows 20% Growth In Lithuania

Electronic Money and Payment Institutions Shows 20% Growth In Lithuania

by July 13, 2020

At the end of 2019, a total of 115 electronic money institutions (EMIs) and payment institutions (PIs) operated in Lithuania, comprising a one-fifth increase compared to the previous year.

According to the audited annual financial statements, corporate income from licensed activities increased 1.6 times — from €41.08 million to €66.1 million. Within its supervisory mandate, the Bank of Lithuania mainly focused on the monitoring of compliance with anti-money laundering, own capital and customer funds protection requirements.

Rūta Merkevičiūtė

Rūta Merkevičiūtė

“The audited results on the performance of EMIs and PIs in 2019 confirm that the relatively new market does not lack drive to scale up business. Even though 54 institutions incurred losses, the sector’s annual profits reached €3.6 million, with the corporate income tax due amounting to €2.7 million. These institutions have created 605 job positions, with 545 of them occupied in Lithuania,”

said Rūta Merkevičiūtė, Head of the Electronic Money and Payment Institutions Supervision Division at the Bank of Lithuania.

In 2019, in terms of income generated through electronic money issuance and provision of payment services, the share of income earned by the three major market participants shrank, thus reflecting the expanding EMI/PI market.

Having earned almost half of the sector’s income in 2018, the three market participants accounted for only 31% of total income generated by the market in 2019, while income from licensed activities earned by the ten largest EMIs and PIs declined by 14 percentage points year-on-year – from 75% to 61% of the total sector’s income.

The activities of these institutions were mainly focused on payment account services as well as issuance of payment instruments (e.g. payment cards) and processing of incoming payments. The amount of payment transactions executed by EMIs and PIs stood at €16.5 billion.

With regard to the total amount of payment transactions executed over the year, almost one third of the market was held by Paysera LT, UAB, followed by Secure Nordic Payments, UAB, and UAB Perlas Finance. Payment transactions executed by these three EMIs accounted for 58% of the total amount of payment transactions.

Since the beginning of 2019, the Bank of Lithuania has conducted thorough inspections on the EMIs and PIs. Due to irregularities detected, the central bank has revoked three licences, imposed 11 fines (totalling €538.6 thousand), two activity restrictions, issued one warning and three public notices on violations of legislation due to failure to comply with own capital requirements.

The Bank of Lithuania’s supervisory priorities for 2020 remain the same.

Featured image credit: jannoon028 – www.freepik.com

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