An EMI license is a firm licensed by the Bank of Lithuania that may distribute electronic money. Electronic money, which is stored on electronic devices and may be used for payment purposes, is issued by electronic money institutions. In addition to money transfers, payment transactions, cash deposits and withdrawals, electronic money institutions may also offer a variety of services. Because they have less stringent requirements, management of such institutions is subject to less stringent requirements; however, they are subject to restrictions on the amount of electronic money on hand or the amount of payment transactions; these institutions may only operate in Lithuania.
Electronic money institutions may be licensed for limited activities; management of such institutions is subject to fewer demands, with no own funds or shareholding requirements; but they are limited in terms of the average electronic money balance or transaction turnover, which may only operate in Lithuania.
License of an electronic money institution (EMI)
The definition of ‘electronic money’ is given in Article 2 of the Republic of Lithuania Law on Electronic Money Institutions (hereinafter ‘the Law’). It stipulates that ‘electronic money’ is a monetary value represented by a claim on the issuer that is issued in exchange for the monetary funds (hereinafter ‘funds’) received by an electronic money issuer from a natural or legal person and includes the following features:
- is stored electronically (including magnetically);
- is used to make payment transactions;
- is given to individuals other than electronic money issuers.
Institutions other than credit institutions, electronic money institutions (EMIs), and some other institutions may only issue electronic money and redeem it after accepting money from clients in the electronic domain and holding it in payment accounts for a long time (EMIs may only issue electronic money in the Republic of Lithuania or another Member State or provide the services specified in Article 5 of the Republic of Lithuania Law on Payments [EMIs may provide payment services such as issuing and acquiring payment instruments, money transfers, and others]). Because of this, an EMI differs from a payment institution in that an EMI may withhold client funds, whereas payment institutions may not (the position of the Bank of Lithuania on money held in payment accounts is available here).
Within three months of submission of properly and sufficiently informative documents, the Supervision Service must assess an application for an EMI licence. Where documents have not been submitted or have been submitted with deficiencies, the Supervision Service must receive the documents and information required additionally within three months.