There are three types of Fintech financial institutions that can be licensed in Lithuania: Licence of the specialized bank, E-money Institution and Payment Institution. It is important to know how they differ and which one suits you the best.
Three Types of Financial Institutions
All three financial institutions licensed in Lithuania – a specialized bank, electronic money institution (“EMI”) and authorized payment institution (“API”) are entitled to provide different kinds of payment services. Any of the Fintech lawyers in Lithuania could give you more detailed information on the differences, but shortly, the list of services often includes:
- 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 user’s payment service provider or with another payment service provider, including the 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;
- execution of payment transactions with the help of Fintech lawyers in Lithuania, 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; execution of credit transfers, including standing orders.
- issuing of payment instruments and/or acquiring of payment transactions;
- money remittance;
- payment initiation services;
- account information services.
Acquiring a License
Taking into account the scope of the financial services to be provided, Fintech business model may require a particular license. If you are looking to get such license and are not sure which one you need, contact one of the Fintech lawyers in Lithuania for legal help and advice. Also, consider these aspects:
- To provide payment services specified above only and offer instant payments to customers, it is sufficient to have the API license.
- In addition to the payment services, to offer to the client’s e-wallet solutions and store customers’ funds for an unlimited period of time, the EMI license is required.
- In addition to the payment services, accepting of the deposits and other repayable funds from non-professional market participants and grant credits requires specialized bank license.
Please see the position of the Bank of Lithuania on the functionality of the payment accounts, or contact one of the Fintech lawyers in Lithuania for further questions and information.
The wider range of licensed services does require higher investments: a minimum equity capital of the API may vary from EUR 20’00 to EUR 125’000 (depending on the payment services to be provided); the EMI’s equity capital requirement shall be at least EUR 350’000; a specialized bank equity capital shall be at least EUR 1 million. In practice, these amounts should be higher.
The API’s and the EMI’s licenses should be issued within 3 months, whereas for the specialized bank licensing time is doubled (6 months).