PAYMENT INSTITUTION LICENSE FOR GLOBAL MONEY REMITTANCE AND PROCESSING. PAYMENT SERVICE PROVIDER LICENSING IN EUROPE (EU)

Perfect solution for pan-European and global payment processing. Equity capital – from EUR 20 000 to EUR 125 000. Licensing time – from 3 months.

Licensed Payment Institution or Payment Service Provider PSP is a perfect solution for financial service providers, FinTech companies processing corporate payments and money transfers of private individuals and internet merchants. Payment Institution is the most popular license providing payment solutions for internet shops and internet merchants all around the Europe. European Union Payment Services Directive adopted in 2007 provides the legal background to the European single market for payments in all EU/EEA area and Single Euro Payment Area (SEPA).

Fast and easy licensing. Friendly regulation

The Bank of Lithuania combines the functions of a central bank and the financial supervisory authority (regulator). Business oriented regulatory behavior and significantly lower finance institution incorporation, licensing and maintenance costs makes Lithuania preferred jurisdiction for global financial institutions as well as FinTech start-ups. Bank of Lithuania implemented regulatory “Sandbox” in Lithuania aiming to attract fiance institutions coming in to the common European financial market.

Services provided by the payment institution

– services enabling cash to be placed on a payment account

– services enabling cash withdrawals from 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 and/or acquiring of payment instruments

– money transfers

– execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunications terminal equipment, digital or IT device and the payment is made to the telecommunications network or IT system operator, acting only as an intermediary between the supplier of the goods or services and the payment service user

– Payment Initiation Service (PSD2 implementation)

– Account Information Service (PSD2 implementation)

Second Payment Services Directive (PSD2) implementation

Lithuania has already implemented EU Second Payment Services Directive (PSD 2) allowing Payment Initiation Service (PIS) – initiation of a payment order from the client bank account at the request of the client from the payment account held at another payment service provider (bank). PSD 2 also allows Payment Institution provide Account Information Service (AIS) accessing consolidated information from the client accounts held by at another payment service providers (banks) and have overall view of client financial information.

One license for all Europe. Passporting of the license in EU/EEA area

European Union Payment Services Directive (PSD) provides the legal background to the European single market for payments. Payment Institution licensing in one of the member states within the EU/EEA area opens up business opportunities to act and provide services in all other EU/EEA countries, enjoy benefits of a Common Market and advantages of Single Euro Payments Area (SEPA).

SEPA – almost 500 million consumers and over 20 million businesses making and receiving payments in Euro under the same basic conditions, rights and obligations, regardless of their location in Europe. SEPA allows arranging electronic credit transfers and direct debits in Euro at a low cost just as easy as in the home country.

Pan-European payment license issued in Lithuania provides significant competitive advantage and opens up European financial market at significantly lower incorporation and operational costs. Lithuania and primarily its capital Vilnius became a new hub for the FinTech companies focused on international financial markets. Favorable regulatory and tax
environment, excellent infrastructure, fastest internet and quality talent pool makes Lithuania and primarily its capital Vilnius attractive to large international finance institutions as well as FinTech start-ups.

Reasons why Lithuania is top jurisdiction for Payment Institution licensing

– No particular requirement for the directors and board members  to reside in Lithuania/Europe.

– Application for a license submitted without establishing a company and freezing equity capital.

– Fast licensing process.

– Licensing documentation can be submitted in English.

– Possibility to provide individual client IBAN accounts. Lookup for the IBAN account according to the alternate identifier: mobile phone number (MSISDN) and Email (URI).

– Direct access to Single Euros Payment Area (SEPA) through the CENTROlink payment system managed by the Bank of Lithuania (Central Bank). Only the banks in other jurisdictions can access SEPA directly.

– Possibility to safeguard client funds in the accounts of the Bank of Lithuania (Central Bank of EU member state).

– PSD2 implementation allowing Payment Initiation Service (PIS) and Account Information Service (AIS).

– Remote client verification. Innovative “know your customer” processes for remote client verification allows to open the accounts without physical presence of the client.

– License allows provision of the financial services in all EU/EEA area without any additional licensing.

– Start-up visa. Special visas for citizens of non-EU/EEA countries running innovative businesses in Lithuania.

Being part of ECOVIS International consulting network present in more than 80 counties around the world ECOVIS ProventusLaw currently considered as the most experienced financial licensing advisor in Lithuania. ECOVIS licensed more than 30 Payment and Electronic Money institutions in Lithuania including big names as deVere, Instarem, Contis Group setting up their European operations in Vilnius. ECOVIS ProventusLaw provides all the necessary services for the Payment Institution licensing, including preparation of licensing documentation, representation at the Bank of Lithuania during the licensing procedure, company incorporation, office registration, advice on IT, HR, compliance and other issues rising during the incorporation of payment business in Europe. After the licensing procedure completed, ECOVIS offers accounting, reporting, audit, compliance and legal services for the operational business.

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Kęstutis Kvainauskas

Lawyer, attorney at law, partner of the law firm.

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