Banks, Financial Services, Fintech, Internet, Lithuania
International Internet Magazine. Baltic States news & analytics
Friday, 26.04.2024, 22:47
Bank of Lithuania: The number of electronic money and payment institutions as well as the sector’s income continue on an upward trend
According to the audited (where audit is mandatory) annual
financial statements approved by the general meeting of shareholders, corporate
income from licensed activities increased 1.6 times – from EUR41.08 mln to EUR66.1
mln. 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.
“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 EUR3.6 mln, with the corporate income tax due amounting to
EUR2.7 mln. 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.
At the end of 2019,
67 EMIs and 48 PIs operated in Lithuania. In terms of licensed EMIs, the country
is the leader in continental Europe.
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
major 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 EUR16.5 billion. The largest
turnovers were generated by payments made by legal persons, with payments
from/to the European Union being most prevalent in terms of the value of
payment transactions.
As regards the total amount of payment transactions executed over the last 12 months, 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 inspections of five EMIs and PIs (checks on money laundering risks), an analysis of money laundering risk management controls provided in documents of five EMIs and PIs, an analysis of adequate separation and protection of customer funds of 13 EMIs and PIs and one investigation regarding delays in execution of payment transactions. In 2020, the Bank of Lithuania also started three more analyses on adequate separation and protection of customer funds and two analyses on the scope of the provided services, as well as conducted analyses of over 20 EMIs and PIs that have failed to commence their licensed activities. Since the beginning of 2019, due to irregularities detected in these areas, the Bank of Lithuania has revoked three licences, imposed 11 fines (totalling EUR538.6 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.
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