Payment institution license in Lithuania: how to get PSP license

Golden coins, banknotes, and crisp bills — all cash has lost its status as the only possible means of payment long ago. Global tendencies demonstrate that the need for cash is decreasing since modern payment instruments conquer numerous users by its universality, speed, and simplicity.

Today, electronic money have become the object of legal regulating, and its emission — a competitive activity in the financial field of the economy of numerous countries. In our new article, we will dig into details of the Lithuanian legislation and tell how to obtain a PSP license in Lithuania.

Electronic Money Issuer Licensing

Numerous financial companies choose Lithuania for registration, since fintech businesses with “residence permit” in this jurisdiction have a possibility to provide services in the entire European region. In this country, you can obtain:

Electronic Money Institution, EMI;
Payment Service Providers, PSP;
limited versions of EMI and PI;
license for Account Information Services.

What does the Lithuanian PSP license offer? Companies licensed as payment institutions can provide a broad range of financial services in the legal field. This permit gives the right to get connected to a uniform payment system of the EU zone, therefore, a licensee can accept payments in various currencies from third parties, as well as perform and provide rapid transfers between financial institutions.

Learn more about the EMI license in Lithuania by following this link.

Interesting is that an organizational structure of a company can be prepared before obtaining a license, and establish a legal entity after the consideration of the application and its issuance.

How to obtain EMI and PSP licenses in Lithuania: registration, requirements, period for consideration of documents

The PSP license is issued by a supervisory authority for an indefinite term. The Law of the Republic of Lithuania «On Payments» contains the description of payment services that can be provided by licensees:

Money deposit on bank accounts, as well as operations required for their functioning;
Money withdrawal;
Payment transactions: money transfers to the checking account of a payment service user from a payment service provider or with another payment service supplier (debits, including one-time debit, payment transactions made with a payment card or similar device and/or credit transfers, including standing orders);
Payment transactions with funds covered by the credit line of the payment service user (debits (including one-time debit)), as well as payment transactions made with a payment card or similar device and/or credit transfers, including standing orders;
Payment instrument issuing or acquiring;
Money transfer;
Payment initiation service;
Payment transactions carried out with the help of special telecommunications terminal equipment, digital or informational equipment.

There is also a separate service for the provision of the information on payment accounts.

Electronic money institution has thus the right to:

issue electronic money;
provide credits connected with the payment of services stated in the Law of the Republic of Lithuania «On Payments»;
provide additional services (the electronic money issuance and (or) the provision of such payment services as currency exchange, storage of funds, data storage and processing);
payment systems management;
other activity if it is provided by current legal acts.

The PSP license in Lithuania enables the provision of payment services throughout the European Union with no need to go through additional licensing in other member state of the European Economic Area. It is possible thanks to the certification procedures: it gives the company a chance to enlarge the scope of the license by informing local regulators in other European countries.

Share capital requirements for PSP licensing in Lithuania

PSP licensing in Lithuania has the following requirements. If the company plans to deal exclusively with money transfers, its minimum share capital is €20,000. But in the case of the provision of other services, it must be no less than €125,000.

Requirements for administrations and Controlled commission of PSP institutions

Such financial institutions may have various organizational structure. If the company plans to have one director, such authorities are required: CEO, general meeting of shareholders, board, and Controlled Commission. As a rule, a board of directors is created and the post of CEO as its head is established. Controlled commission is not mandatory.

The Lithuanian legislation provides strict rules regarding company founders applying for the license. They must meet several criteria:

impeccable reputation, appropriate higher education (law, management, business administration) and relevant work experience;
ability to ensure strong management over a payment institution in accordance with the prudential norms (mandatory requirements provided by the regulator (Bank of Lithuania), thus ensuring the liquidity, solvency, reliability of a financial institution, protection of shareholders and investors);
financial trust (money origin must be confirmed).

As for board members: at least two of them must have higher education in the above stated fields or must have worked in the aforementioned fields for at least 1 year during the past 5 years.

Similar requirements regarding the reputation, high qualification, and experience, are put forward for the head of an electronic money institution. He/She must have higher education in the field of law, management, business administration or economics.

Heads of structural units, in case the payment institution provides payment services and carries out other activities, must have higher education in these fields.

Heads of affiliates established in another EU country must have higher education in the aforementioned fields and must have worked at financial institutions in the field of the provision of financial services for at least 1 year during the past 5 years.

If the candidate for the post of CEO does not meet the aforementioned requirements though possesses the relevant qualifications and experience, he/she may also be appointed to the position of the head. But the chances for licensing reduce.

The term of consideration of documents and PSP licensing in Lithuania

The PSP licensing term is 3 months after filing the documents to the Central Bank, similar to EMI licensing. The regulator uses this period to examine and issue a positive decision on licensing.

If any deficiencies are identified (form or content of the documents), the term of consideration changes. The regulator has the right to request the missing information or corrected forms. In this case, the term of consideration is extended and will be counted from the date when the last documents were filed.

Requirements for the office for PSP institutions

A real company office is required to obtain a PSP license in Lithuania.

The cost of our services for PSP licenses

We provide the “turnkey” electronic money licensing in Lithuania. The cost of services is from €40,000–45,000. The indicated price does not include recruiting and office selection.

Opening a banking account

A banking account of a financial company can be open in any bank of any jurisdiction, since the legislation does not provide any requirement for the jurisdiction of the company’s account. However, we recommend opening the first account in one of the banks registered in Lithuania. There are several reasons for this step. Firstly, it will gain more trust for the regulator when deciding on licensing. Secondly, there will be no suspicions regarding the complete money withdrawal from Lithuania.

If you intend to obtain a PSP license in Lithuania or other countries, address the SBSB Lawyers. We offer individual solutions on the choice of jurisdiction and type of licensing. Contact our specialists by using the phone numbers indicated on our website or submitting a form located on the left side of the website page.