A payment institution is a company licensed to provide payment services, such as payment accounts, transfers, card issuing, merchant acquiring and money remittance. It cannot take deposits and, unlike an electronic money institution (EMI), it cannot issue stored value that customers keep and spend later.
The Bank of Lithuania licenses and supervises payment institutions. A full licence lets the firm serve customers in every European Economic Area state after a notification procedure, so a single Lithuanian licence can support a pan-European payments business.
The Bank of Lithuania issues three kinds of payment institution licence. The choice depends on the services and on whether the firm will operate outside Lithuania.
| Licence | What it covers | State levy |
|---|---|---|
| Payment institution licence | All or some services in Article 5 of the Law on Payments; can be passported | EUR 898 |
| Restricted-activities licence | Services in Article 5(1) to (5) only; Lithuania only; average monthly transactions up to EUR 3 million | EUR 682 |
| Account information services licence | Account information services only | EUR 693 |
The restricted-activities licence has no minimum capital requirement, and its shareholders are not subject to the fitness and propriety assessment that applies to a full licence. It suits a domestic launch; a firm planning to serve other EEA states should apply for the full licence from the start. Where customers will hold stored balances, the right licence is an EMI licence, described in the firm's guide to the Lithuanian EMI licence.
| Payment service | Typical product | Initial capital |
|---|---|---|
| Cash placed on and withdrawn from a payment account | Account with cash top-up or ATM access | EUR 125,000 |
| Executing payment transactions, including from a credit line | Credit transfers, standing orders, direct debits, card payments | EUR 125,000 |
| Issuing payment instruments and acquiring | Visa or Mastercard cards, merchant acquiring | EUR 125,000 |
| Money remittance | International money transfer without an account | EUR 20,000 |
| Payment initiation | Open banking payments from a customer's bank account | EUR 50,000 |
| Account information | Open banking data aggregation | No capital; insurance required |
Where a firm requests several services, the highest applicable capital amount applies, and initial capital must be maintained at all times. Remote onboarding with electronic identity verification is permitted, provided it meets the anti-money laundering rules.
The Bank of Lithuania expects a payment institution to be ready to provide services safely and soundly on the day it is licensed. The application must show the complete operating business.
Initial capital is set by service, from EUR 20,000 to EUR 125,000, as in the table above. After licensing, own funds must also meet the ongoing requirement calculated under the Bank of Lithuania's prudential rules. The business plan should fund at least three years of operation above the minimum.
Holders of a qualifying holding must have good repute, be financially sound and support sound and prudent management. The source of the capital must be documented.
Directors and key function holders must have good repute and the qualifications and experience for their roles, assessed under Resolution No 03-181. The registered office and head office must be in Lithuania, and the Bank of Lithuania looks for a business that is run from Lithuania: a chief executive and senior managers based there, a local MLRO, and compliance, risk management and internal audit functions in place.
Providers of payment initiation or account information services must hold professional indemnity insurance covering their liability to customers and banks.
A payment institution that holds customer funds must safeguard them, either in a separate account at a credit institution or invested in secure, low-risk assets, or covered by an insurance policy or a guarantee. The Bank of Lithuania states that customer funds cannot be held in central bank payment systems for safeguarding purposes, so the firm needs a commercial safeguarding account or insurance before launch. The firm's safeguarding and client assets service sources these accounts.
Licensed payment institutions can apply to join CENTROlink, the payment system operated by the Bank of Lithuania, for direct access to SEPA Credit Transfer, SEPA Instant and SEPA Direct Debit. Lithuanian institutions complete a self-assessment and a compliance report, and an audit report may also be required.
| Document | What it shows |
|---|---|
| Application form and company details | The applicant and the services requested |
| Programme of operations | Each payment service, customers and markets |
| Business plan | Three-year forecasts and own funds calculations |
| Organisational structure | Functions, agents and outsourcing |
| Evidence of initial capital | Capital paid up at the required level |
| Safeguarding measures | How customer funds are protected |
| Governance and internal control | Risk management, compliance and internal audit |
| Incident and complaints procedures | Security incidents and security-related complaints |
| Sensitive payment data and continuity | Data protection and business continuity |
| Statistical data principles | Performance, transaction and fraud data |
| Security policy | Security risk assessment and controls |
| Anti-money laundering internal controls | Risk assessment, due diligence, monitoring and reporting |
| Auditor, directors and shareholders | Identity and fitness and propriety evidence |
The Bank of Lithuania confirms within 5 business days whether all documents have been submitted. It must then decide within 3 months of receiving complete and sufficiently detailed documents; where it requests more, the 3 months run from the date they are provided. For a restricted-activities licence the period is 2 months. The Bank of Lithuania notes that it usually requests additional information, and that applications for fewer services take less time.
| Stage | Typical duration | Basis |
|---|---|---|
| Completeness check | 5 business days | Bank of Lithuania |
| Statutory decision period | 3 months (2 for restricted) | Bank of Lithuania |
| Submission to licence | 6 to 8 months | Firm's planning figure, including comments |
The Bank of Lithuania has raised its supervisory expectations of payment and e-money firms since 2023, with inspections, fines and licence revocations where anti-money laundering, safeguarding or governance controls fell short of the law. Earlier descriptions of a light first year of supervision no longer reflect its approach.
The proposed PSD3 and Payment Services Regulation will replace the current framework. The Council and Parliament reached political agreement in late 2025; at the date of review the texts had not been formally adopted or published in the Official Journal. The firm's PSD3 and PSR briefing explains what existing institutions should prepare.
Firms weighing Lithuania against other member states can compare them in the firm's EU jurisdiction comparison. The firm's Lithuania payment institution licence service prepares the full application and manages the Bank of Lithuania review through to licensing.
EUR 20,000 for money remittance only, EUR 50,000 for payment initiation only and EUR 125,000 for other services. A restricted-activities licence has no minimum capital requirement.
The state levy is EUR 898 for a payment institution licence, EUR 682 for a restricted-activities licence and EUR 693 for an account information services licence.
It must decide within 3 months of receiving complete documents, or 2 months for a restricted licence. The firm plans 6 to 8 months from submission, including comments.
A full payment institution licence can be passported to every EEA state after notification through the Bank of Lithuania. A restricted-activities licence is valid only in Lithuania.
A payment institution provides payment services but cannot issue e-money. An EMI can issue e-money, such as stored wallet balances, and needs EUR 350,000 initial capital.
The head office must be in Lithuania and the business must be run from there. In practice the chief executive, MLRO and key control functions are based in Lithuania.
Yes. Licensed payment institutions can apply to join CENTROlink, the Bank of Lithuania's payment system, subject to its participation requirements.
Buckingham Capital Consulting has obtained payment institution authorisations for firms including Nexpay, Orbital and Global Send since 2013, and prepares Lithuanian payment institution applications to the Bank of Lithuania's published requirements. The firm builds the capital plan, safeguarding and anti-money laundering frameworks alongside the application, and arranges the safeguarding and operating accounts the institution needs to launch.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.