The authorization process of Payment Institution (PI) license is conducted by the Bank of Lithuania. There is a specific procedure and a list of documents required to be submitted with an application for authorization to the Bank of Lithuania.
Bulota Legal is in partnership with the Baltic Banking Service assisting newly establishing financial institutions in IT solutions. Therefore, an applicant for PI license receives full package of IT and legal service.
Video presentation made by Invest Lithuania
Available payment services of payment institution
In order to provide the following payment services, holding a payment institution licence is necessary:
- services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account;
- services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;
- execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the payment service user or with another payment service provider: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders;
- execution of payment transactions where the funds are covered by a credit line for a payment service user: execution of direct debits, including one-off direct debits, execution of payment transactions through a payment card or a similar device and/or execution of credit transfers, including standing orders;
- issuing of payment instruments and/or acquiring of payment transactions;
- money remittances;
- payment initiation services;
- account information services.
Payment institution difference from the EMI
Payment institution (PI) cannot withhold the funds of a client for a relatively longer time than necessary for the execution of a payment transaction; therefore, for clients to be able to hold funds in payment cards or other technical instruments such as an ‘e-wallet’, a PI licence is not sufficient. In such a case, an electronic money institution (EMI) or bank licence is necessary.
More information about EMI license can be found here.
The following basic stages in the authorisation process:
- submission of an application for a PI licence to the Supervision Service of the Bank of Lithuania;
- assessment of an application for a licence of a PI and attached documents: where the documents submitted have no deficiencies, the licence is issued within the shortest possible 3 month term;
- issuance of a licence or refusal to issue a licence.
PI license fee
Prior to applying for a PI it is necessary to pay into the account of the State Tax Inspectorate a state fee for the granting of the PI licence, which currently about 900 EUR. For PI providing only account information services, the licence fee is about 700 EUR.
Key requirements for PI being established or authorised
PI being established or authorised must be prepared to comply with all requirements set for it, as a PI in operation, the Bank of Lithuania requests that detailed data is submitted already at the time of application. There are the following basic elements:
- fitness of submitted documents;
- compliance with the minimum capital requirement for PI: according to the law PI must possess a minimum equity capital of no less than 20,000 EUR (only money transfer services) or 50,000 EUR (executing only payment initiation services) or 125,000 EUR (more details per request);
- the average amount of payment transactions executed over the last 12 months by PI including intermediaries for which they assume full responsibility shall not exceed 3,000,000 EUR per month;
- fitness and propriety of the PI and its shareholders or holders of voting right;
- fitness and propriety of heads of a PI: the heads of a PI must be of good repute and possess the qualification and experience necessary to properly perform their duties;
- the business plan must correspond to the possibilities of PI founders.
PI providing payment initiation or account information services must be covered by professional indemnity insurance.