Lithuania 2025

Market Analysis
Payment Organisation	None
Domestic Payment Brands	No domestic payment brands.  Domestic cards were phased-out 2009.
Market Structure	The Lithuanian card market has a competitive, decentralised, infrastructure composed of five major issuers, six major acquirers, card processors, four ATM networks and six major POS networks. Following the UK’s withdrawal from the EU, several UK card portfolios have been migrated to Lithuania, leading to a 123% increase in the number of cards in circulation in 2021. By 2023 the growth in the number of cards had normalised to 13.47%.  Debit cards had a market share of 82.85% of cards at end-2023.   As in the other Baltic states, the Swedish banks SEB and Swedbank are key players in the Lithuanian bank market.  In 2015, Lithuania became the 19th member of the euro system.  The Bank of Lithuania has been active in re-shaping the country’s regulatory framework to create an EU friendly environment for start-ups wishing to take advantage of EU passporting rights  Emerging Open Banking payment ecosystem. Improving AML capabilities.
Notable Market Trends	Contactless rollout of cards and POS terminals, mobile payment apps, instant payments, biometric ID.  The lingering impact of the pandemic, plus card portfolio migration from the UK following Brexit, led to a 19% jump in card payments, a 25% rise in cross-border payments and a 22% increase in remote online card payments.
Major Card Issuers	Bankas Swedbank, SEB Bankas, Luminor Bank.
Major Card Acquirers	SEB Bankas, Bankas Swedbank, Citadele Bankas.
Major Card Processors	Worldline Lithuania (previously First Data Baltics).
Key Statistics 2023
Population	2.88 million with 13.70 cards per capita
Cards	Debit: 32.76 million Credit: 0.41 million Total payment cards: 39.55 million
Card Payments	Debit: 2,498.22 million, value €60.43 billion  Credit: 48.22 million, value €1.88 billion  Total: 2,547.11 million; value €62.36 billion
POS Terminals	355,029
POS Payments	All cards: 559.67 million; value €11.30 billion
ATMs	709 ATMs with cash function
ATM Withdrawals	All cards: 40.57 million; value €8.36 billion
Digital A2A Payments	Credit transfers: 519.7 million, value: €526.5 billion – thereof instant payments: 125.4 million, value: €133.5 billion Direct debits are usually only intra-bank payments.
Note: The association of Lithuanian Banks no longer provides details at an individual bank level. Note: Italic forecast figures for 2024F are estimated in the market context based on 2023 figures.
Source: ECB, Lietuvos Bankas (Bank of Lithuania)

General Note – ECB changed its statistical reporting

In the 22nd Edition of the Digital & Payment Card Yearbooks there were some statistical reporting changes to address. The statistical data for 2022 was based on the new ECB regulation ECB/2020/59, which replaced the ECB reporting statistics regulation from 2013 up to 2021 (ECB/2013/43), the well-proven ECB bluebook reporting was discontinued.

For 2022, the ECB declared all data as provisional, because the first-time reporting under the new standard may include errata and double counting.

The researchers and editors worked hard in the 22nd edition to balance out any obvious errata, but it remains that in some instances the data from 2022 cannot be compared to 2021 and previous years.

Where this has occurred, we have clearly stated it and have added explanation to the table and text.

In this, the 23rd Edition we have clarified any errata and filled in all missing data from the previous year.

Introduction – Payments in Lithuania

Lithuania is a semi-presidential republic with a unicameral parliament. Lithuania became a member of the European Union in 2004, and the eurozone in 2015.

Lithuania has developed a reputation for being a hotbed of FinTech innovation and was one of the first countries in Europe to launch instant payments, which form an increasingly important part of non-cash payments. Since the UK’s withdrawal from the European Union, Lithuania has become the favoured launching pad and destination for FinTech and e-money firms, as can be seen by the number of UK payment card portfolios that have been migrated to the country from the UK.

Lithuania’s central bank is also an enthusiastic proponent of using central bank digital currencies and has used its LBCoin digital coin project as the test component for a possible digital euro.

The adoption of the revised Payment Services Directive, PSD2, and disruptive technologies have set the stage for digital payments for the digital economy in Lithuania. They have accelerated digital payment transformation and mobile payment services, as well as cardless IBAN-based payments directly from bank accounts. 

In the last decade, Lithuanian consumers have embraced mobile devices such as tablets, smartphones and Internet of Things (IoT). This change significantly impacts their shopping experience. Consumers have become increasingly connected and they have started to purchase anywhere, at any time, from any device. 

In addition, new consumer demands are a game changer. Lithuanian consumers like digital banking apps with access to all their accounts at different banks in one single app, with the option to make payments directly from their bank account of choice. Additionally, they appreciate more banking services and payment services added to their mobile banking app. Consumer adoption of digital payments in Lithuania is driven by minimal cost, secure payments and a high level of user convenience. 

Driven by the development of social media and mobile devices, the emergence of permanently connected consumers has impacted their interactions with brands but also their expectations of how to shop using the increasing number of touch points between consumers and merchants, e.g.: 

• Using mobile devices in-store to look up products or additional information on the internet 
• Using mobile devices in-store to shop at the same merchant or online at another merchant 
• Using mobile devices to purchase at home in online shops or scan outdoor for advertised products 
• Using mobile apps to shop online, or using QR-codes to bridge from merchant posters to their online shops

 

The ongoing rollout of a mature online and mobile communication infrastructure is an enabler for digital card payment transformation and for Open Banking payments in Lithuania. 

In a few years from now, mobile banking apps and mobile payment apps are expected to combine account management, digital payment services, personal finance management and value-added digital services from location finders to digital vouchers. 

Cash payments, card payments and cardless payments directly from bank accounts (A2A payments) remain all relevant for Lithuanian merchants and heavily used by Lithuanian consumers. 

This country profile provides an introduction into two competing payment ecosystems in Lithuania: 

• Card payment ecosystem 
• Cardless Open Banking payment ecosystem 

 

Legal Framework for Payment Services

The legal framework for European payment services is a joint project undertaken by the European Commission as the regulator, the European Central Bank (ECB) as the Euro System, and the European Payments Council (EPC) with the objective of standardising payments in Europe and to remove existing barriers, promote cross-border competition between payment services, strengthen the European internal market and drive the digital payment transformation. 

Based on its vision, the EU Commission has therefore created a unique legal framework for cashless B2C and B2B payments that supersedes pre-existing national legislation and is binding for financial service providers and payment service providers throughout the EU. 

Lithuania has largely transposed this legal framework into their national payment legislation. 

Historically, there has been a de facto national regulation of all Lithuanian payment schemes with high technical barriers to ensure and defend payment security. 

With the implementation of the payment services directive, all payment services in Lithuania are based on the unique legal framework for payment services of the European Commission effective in the European Economic Area (EEA). 

In addition, the respective rules and regulations of the domestic card scheme and the international card schemes continue to be applied by the card payment service providers (e.g. EMV, PCI, RTS SCA, and SEPA Cards Framework), respectively. 

Legal Framework relevant for Payment Services in Lithuania

The revised Payment Services Directive, PSD2, had established a legal and regulatory framework for payment services providers, enforcing several protections for their clients such as safeguarding of funds; and required them to execute processes in accordance with banking regulations, such as KYC and AML. It has already resulted in significant progress regarding the integration of the European retail payments markets. 

Following the alignment with the EEA region, the legal framework for payment services in Lithuania includes the directives and regulations of the European Commission (EC), the ECB, and/or the national central bank (NCB) of the individual country. 

All card payment service providers and all cardless payment service providers of the Open Banking payment ecosystem must apply for the European legal framework including: 

Revised Payment Services Directive (PSD2)
PSD2 is the key directive for borderless banking and payment services in Europe.
Among others, PSD2 regulates digital payment services and payment service providers such as payment institutions, e-money institutions, payment initiation service providers and account information service providers. PSD2 formulates the Open Banking Mandate for regulated access to payment accounts. 

General Data Protection Regulation (GDPR) – effective from May 2018 
GDPR establishes a regulatory framework for customer control of their data through consent mechanisms, the right to be forgotten and the right to retrieve all personal data for re-use at other service providers of choice, thereby preventing a ‘lock-in’ situation. 

E-Money Directive (EMD)
The EMD sets out the rules on the business and supervision of e-money institutions. 

Anti-Money Laundering Directive (AMLD)
The AMLD6 aims to improve the harmonisation of the criminal liability of money laundering and terrorist financing across the EU27. 

Customer Rights Directive (CRD)
CRD gives consumers the same strong rights across the EU. It aligns and harmonises national consumer rules, for example on the information consumers need to be given before they purchase something, and their right to cancel online purchases, wherever they shop in the EU. 

EU Price Regulation for cross-border payments
In 2001, Regulation (EC) No 2560/2001, followed in 2009 by Regulation (EC) No 924/2009, fixed uniform underlying conditions for processing cross-border payments in euro, and the fees for intra-EU cross-border payments in euro were aligned with those for domestic payments in euro. 

SEPA End-Date Regulation
SEPA payment instruments replaced domestic A2A payment instrument formats for euro payments. 

Card Interchange Fee Regulation (IFR)
The IFR caps interchange fees for payments with consumer cards, effective from 9 December 2015. It increases transparency on fees thus permitting retailers to know the level of fees paid when accepting cards. 

Domestic bank service laws
Complementary to EC directives and EC regulations.

Characteristics of the PSD2 Outlook: PSD3 and PSR

The adoption of PSD2 has formalised the relationship between banks and trusted payment providers (TPPs) by establishing the Open Banking Mandate providing open access to customer account data and the payments infrastructure. This is expected to stimulate the FinTech market to develop new integrated services models for both consumer and business customers. 

This regulation is a reaction to the growing demand from customers as mobile and internet applications have become widely adopted driving expectations in how services should be delivered across all industries. Other market segments have adopted Open Banking APIs to respond to this demand and shown that innovative applications can grow business and change customer behaviour. 

PSD2 has a significant impact on the European payments industry. According to the EC, the revised Payment Services Directive brings several new important elements and improvements to the EU payment market e.g.: 

• To restrict the exceptions where payments services are outside of the PSD 
• To include currencies other than the euro currency in the scope of the PSD2 
• To include white label ATM service providers to be licensed as payment institutions 
• To include Payment Initiation Service Providers (PISPs) in the scope of the PSD2 
• To include Account Information Service Providers (AISPs) in the scope of the PSD2 
• To cover regulatory challenges regarding surcharges on card transaction (‘forbidden’) 
• To cover regulatory and security challenges posed by a range of online payments services and new mobile payments services expected to explode onto the European scene over the next two years 
• Regulation of Payment Initiation Services – It facilitates and renders the use internet payment services more secure, by including within the PSD2 scope, the new so-called payment initiation services. These services operate between the merchant and the purchaser’s bank, allowing for cheap and efficient electronic payments without, for example, the use of a credit card. These service providers will now be subject to the same high standards of regulation and supervision as all other payment institutions. 
• Access to Current Account (XS2A) – to cover regulatory and security challenges posed by single leg transactions e.g., the regulatory approved access of non-bank payment initiation services to the bank account of a user at the user’s bank, once access is granted by the user (‘get account information’). PSD2 mandates that the information details exchanged between trusted payment providers (TPPs) and account holding banks (ASPSPs) is as minimal as possible. For example, the PISP may only receive a Yes/No answer from the consumer’s bank about availability of funds before initiating the payment. 
• At the same time, banks and all other payment service providers will need to step up the security of online transactions by including strong customer authentication for payments. 
• Consumers will be better protected against fraud, possible abuses and payment incidents (e.g. in case of disputed and incorrectly executed payment transactions). Consumers may be required to face only very limited losses – up to a maximum of €50 (vs €150 currently) – in cases of unauthorised card payments.
• The proposal increases consumer rights when sending transfers and money remittances outside Europe or paying in non-EU currencies. 

 

In 2022, the regulator started a PSD2 review process, which will end up in a revised PSD2 dubbed PSD3. While consultations are currently ongoing, the revisions are expected to address the achievements of the PSD2 and evaluate the need for a revised standard.

Proposed EC Revisions to the EU Payment Services Regulation – PSD3 and PSR 

In June 2023, the European Commission (EC) has published its proposed revisions to EU payment services legislation, as well as a proposal on Open Finance/data access in the financial services sector beyond Open Banking/payment accounts in the form of a new Open Finance framework called “FIDA”. 

Essentially, the EC is proposing that PSD2 would be split into two different instruments. These will ensure consumers can continue to make electronic payments and transactions safely and securely in the EU, domestically or cross-border, in euro and non-euro. Whilst safeguarding their rights, it also aims to provide greater choice of payment service providers on the market: 

• A third Payment Services Directive (PSD3) that would deal with the authorisation process for payment institutions (PIs), for electronic money institutions (EMIs) and the prudential regime. The directive remains the most appropriate instrument since licensing and supervision of PIs remains a national competence of EU Member States. 
• A separate Payment Services Regulation (PSR) that would deal essentially with rules (and related penalties) for PSPs and users. The European Banking Authority (EBA), in its Opinion on PSD2 (published in June 2022), identified differences in Member States’ approaches to applying PSD2, and an EBA Peer Review (published in January 2023) concluded that deficiencies in approaches led to different supervisory expectations for PIs and EMIs. Among others, the PSR includes a shift in liability that adds complexity for financial institutions combatting APP fraud scams and new account fraud. 
• A proposal on Open Finance/data access in the financial services sector beyond Open Banking/payment accounts in the form of a new Open Finance framework called “FIDA”, a legislative proposal for a framework for financial data access. This framework will establish clear rights and obligations to manage customer data sharing in the financial sector beyond payment accounts. In practice, this will lead to more innovative financial products and services for users and will stimulate competition in the financial sector. 

 

The objective of the regulation is to enhance harmonisation of the rules and enforcement across the various EU Member States. In addition, the EC proposed to merge the E-Money Directive (EMD2) with the proposed PSD3 and PSR texts, so as to have one coherent regime for both payment services and e-money services, and thereby ensure a level-playing field between PIs and EMIs. 

PSD3 also amends the Settlement Finality Directive (SFD) in order to allow non-bank PSPs (e.g. PIs and EMIs) to participate directly in SFD-designated payment systems. Fintechs will be given access to all EU payment systems, with appropriate safeguards, and giving them a right to have a bank account. That way, those non-bank PSPs would no longer need to rely on banks in order to execute payment transactions. 

A system to check IBANs and a platform to enable payment service providers to share fraud-related information are two proposals around consumer protection, including an extension to all credit transfers of IBAN/name-matching verification services. These have been proposed by the Commission for instant payments in Euro. All consumers should benefit from them, for both regular and instant credit transfers. 

The European Banking Authority (EBA) is given once again a number of mandates under PSD3 and the PSR to prepare draft regulatory technical standards (RTS) and draft implementing technical standards (ITS), ultimately to be adopted by the EC, as well as guidelines, and to continue maintaining the register. 

In 2024, significant progress was made in updating PSD2. In April 2024, the European Parliament adopted the European Commission’s proposals for PSD3 and PSR at first reading. While the exact timelines for enforcement are not yet confirmed, it is anticipated that the finalised versions of PSD3 and PSR may become available early 2025.

General Data Protection Regulation (GDPR) 

The General Data Protection Regulation (GDPR) is a legal framework that sets guidelines for the collection and processing of personal information from individuals who live in the European Union (EU). Since the Regulation applies regardless of where websites are based, it must be heeded by all sites that attract European visitors, even if they don’t specifically market goods or services to EU residents. 

Adopted in April 2016, the Regulation came into full effect in May 2018, after a two-year transition period. The GDPR replaces the Data Protection Directive 95/46/EC and is designed to: 

• Harmonise data privacy laws across Europe
• Protect and empower all EU citizens data privacy
• Reshape the way organisations across the region approach data privacy

 

The GDPR mandates that EU visitors to all websites must be given a number of data disclosures. Sites must also take steps to facilitate such EU consumer rights as timely notification in the event of personal data being breached (breach notification). Among others, the GDPR mandates the user’s right to access its data and the right to be forgotten. In addition, the conditions for consent have been strengthened, and companies are no longer able to use long, illegible terms and conditions full of legalese. Also, it must be as easy to withdraw consent as it is to give it. 

eIDAS regulation and Digital ID Trends

The electronic Identification, Authentication and Trust Services regulation (eIDAS) is a set of EU standards and regulations for electronic identification and trust services for electronic transactions in the European Single Market. It was established in the EU Regulation as of 23 July 2014, relating to electronic identification, and repeals directive 1999/93/EC from December 1999. It entered into force on 17 September 2014 and applies from 1 July 2016 except for certain articles, listed under its Article 52. 

In June 2021, the European Commission proposed an update to eIDAS that will enable every European to have a set of digital identity credentials recognised anywhere in the EU. With eIDAS 2.0, by 2024, all EU member countries must make a digital identity wallet available to every citizen who wants one. Many digital ID schemes operate based on super-secure passwords and/or mobile apps confirmed by a second factor, either passwords or one-time token or biometric factors such as fingerprints. 

Digital ID in Europe has been proliferating rapidly in recent years. To date, both the nature of these schemes and their application have varied widely – for example, BankIDs in the Nordics being used to support instant payments and the delivery of harmonised government services. 

eID platform initiative – In May 2017, a group of European companies including banks, vehicle manufacturers and technology providers signed a “corresponding declaration of intent” to establish a joint, pan-industry platform that will let their customers use a so-called “master key” for registration and identification when accessing online services across a range of sectors including government, aviation and retail. 

Many digital ID schemes operate on the basis of super-secure passwords and/or mobile Apps confirmed by a second factor, either passwords or biometric factors such as fingerprints. However, proposals are being considered for blockchain-enabled digital ID – and discussions about the harmonisation of digital ID schemes are ongoing at both national, regional and supra-national levels across the continent. 

Lithuania has made significant strides in digital identification, offering several advanced solutions for electronic document signing and identity verification:

1. LT ID: A mobile application launched by the State Enterprise Centre of Registers for e-document signing and identity verification.It allows users to:
   • Sign documents with a qualified e-signature
   • Seal documents with an e-seal (for companies and organizations)
   • Confirm identity in the electronic environment
2. Smart-ID and Mobile-ID: These have become the first digital identity tools in Lithuania to be recognized by the state as meeting the High Level of Assurance. They provide secure access to online services and meet the highest security standards.
3. ID Cards: Lithuania is updating its ID card system to comply with EU electronic signature rules. However, ID cards issued before January 1, 2024, will no longer be usable for creating qualified electronic signatures starting July 23, 2025.
4. Smart-ID Registration: Lithuanian ID cards issued after July 4, 2012, can be used to register for a Smart-ID account. This allows citizens to access various e-services, including online banking.

 

These digital ID solutions are part of Lithuania’s efforts to maintain its position as one of the EU leaders in the digitalisation of state services, with 84% of the population and 94% of companies using these services.

Biometric Authentication Services

As a form of digital identity, biometric factors have been gaining ground across Europe in recent years, especially since the EU mandated their use for national ID cards and passports from August 2021. 

In the payments industry, European banks and other account servicing payment service providers (ASPSPs) have started to support new biometrics technology companies that will develop client identification and authentication systems. They will be dedicated to the research and development of software for the digital verification and authentication of personal identity, through facial, voice, image or document recognition, or fingerprint reading. 

With the EU regulator’s decision to mandate Strong Customer Authentication (SCA) as part of the revised payment services directive, PSD2, biometric authentications look set to grow further in importance as part of the payments landscape. 

Companies such as Sweden’s Fingerprints (for online payment ID) and the UK’s Fingopay (for physical payments) have pioneered their use in P2P and P2B transactions, while some national ID schemes such as BankID in the Nordics and nemID now include biometric factors alongside PIN in their log-in processes. 

Mastercard Identity Check – In October 2016, Mastercard launched its biometric payment authentication service, Mastercard Identity Check in Germany and another 12 European countries. European consumers can now validate online purchases using 2-factor authentication such as one-time codes sent by SMS or fingerprints in their mobile app. 

Among others, in 2024, payments-specific biometric initiatives and pilots in Europe include: 

• Unlocking mobile wallet apps using biometric ID technology 
• Biometric in-app authentication and biometric logins for one-click access to financial services 
• Biometric in-app authentication of Apple Pay payments 
• Contactless biometric cards that include an integrated fingerprint biometric sensor in parallel to PIN authentication 
• Biometric authentication of cash withdrawals at ATMs using biometric finger vein scanners 
• Finger vein recognition technology to authenticate users at the point-of-sale 
• Lock-screen payment functionality and biometric authentication via Touch ID added to mobile app platforms 

 

In 2020, the Bank of Lithuania reported that the majority of residents changed their means of access to online banking to more secure ones, with a large number of consumers shifting to new means of access to online banking. Commercial banks operating in Lithuania withdrew code cards and encouraged their customers to use the smartphone app (Smart ID), which became the most popular authentication and transaction authorisation tool in the country. In 2020, 50% of Lithuanian residents holding a payment account use Smart-ID for connecting to the online banking system. 

Although statistics has not yet reflected that, biometric authentication, which is faster and more convenient than password (knowledge)-based methods, is gaining popularity in apps used by some banks. However, using such an instrument requires a smartphone with a biometric (fingerprints or face) scanner function.

In early 2020, Luminor Bank announced a digital onboarding solution enabling new customers to set up accounts with a selfie photo. The bank uses a solution which compares the image on the new customer’s identification document with an image created by a 3D biometric map of the customer’s face and enables customers to confirm their identity with a mobile signature. 

In July 2020, iDenfy supplied the Bank of Lithuania with biometric facial recognition technology to pass KYC checks when purchasing LBCoin. LBCoin (see below) is a blockchain-based digital collector coin, which comes with six randomly chosen digital tokens and can be converted for physical silver coins. 

In 2020, Swedbank Lithuania launched biometric authentication in its internet bank, allowing customers to log in as well as confirm payments using either fingerprint recognition or Face ID. According to the bank, customers have quickly adopted and started to use this authentication method to enable easier payment mechanisms. 

Banking Sector

Established in 1922, the Bank of Lithuania (Lietuvos Bankas) is an independent institution operating in accordance with the Constitution of the Republic of Lithuania and the December 2011 version of the Law on the Bank of Lithuania and amendments. The legal framework in which Lithuanian financial institutions and companies operate is based on EC directives and Lithuanian banking laws. The Bank of Lithuania’s Supervision Service Unit supervises the banking sector within Lithuania. 

According to Bank of Lithuania, a significant event occurred in the bank sector in Q4 2011: bankruptcy proceedings were initiated against Bankas SNORAS, the independent bank which had 10% of the domestic bank market. Bank of Lithuania found out that the bank’s liabilities actually exceeded its assets by LTL 2.8 billion. When it became clear that further activities of Bankas SNORAS had no future, bankruptcy proceedings were initiated against the bank. It was pointed out that the case of Bankas SNORAS was exceptional in the banking sector in Lithuania. 

Under the new Law on Payments, as of 1 February 2017 credit institutions were obliged to ensure the right to use the basic payment account service, and thus the basic payment services, for a set fee – €1.50 per month for the general public, €0.75 per month for low-income residents. Basic payment account regulation was accompanied by changes in the usual banks’ pricing – the previous unfavourable pricing for electronic payments, when a fee was charged for each payment transaction, was changed into one that was based on a fixed monthly fee for a payment services basket. 

As of January 2021, the BoL stipulated that the maximum fee for the basic payment account could not exceed €1.45 per month, or €0.72 per month for those receiving social benefits. A survey of payment habits of Lithuanian residents commissioned by the BoL found that at least 65% of adults with a bank account use payment service packages and approximately 20% pay for each service separately. With more market players rolling out instant payments, the BoL added instant payments to the basic payment account package.

According to the BoL, compared to 2021, the price of the basic payment account service remained stable in mid-2022 at €1.45 per month, and the maximum fee for the basic payment account did not change. The pricing in the form of the payment service packages has spread since 2017, with the share of the population opting for various payment service packages increasing since the launch of this service, accounting for around two thirds of the population with an account. By January 2024, the BoL announced that banks and credit unions must ensure that all basic payment services are offered to consumers for no more than €1.47 per month, for low-income residents – no more than €0.73.

On 4 November 2014, the European Central Bank (ECB), via the Single Supervisory Mechanism (SSM), assumed the responsibility of supervising the financial stability of banks operating within the euro zone. However, while the ECB has final supervisory authority over all banks operating within the euro zone, it will only directly supervise those banks classified as ‘significant’ under the terms of the SSM (by September-2024, 113 significant banking groups have been recognised). All other ‘less significant’ banks continue to be supervised by Lietuvos Bankas. 

Structure

According to the BoL, at end-2023, there were 6 Lithuanian commercial banks, 7 specialised banks and 5 foreign bank branches. According to the Association of Lithuanian Banks, the commercial banks operated 173 bank branches as of Q2 2023, serving 20,791,262 customers consisting of 20,523,524 individuals and 267,738 legal entities

In November 2020, the ECB granted a banking licence to Crius LT, UAB. Throughout the course of the year, Sweden’s Handelsbanken, and Latvia’s Industra Bank, established by a Latvian bank, terminated their branches and operations in the country.

In 2023, the number of participants in the banking sector decreased by one: Danske Bank A/S Lithuanian branch finally closed its banking business in Lithuania in Q2 2023 (the Danske Bank technology and service centre continues to operate in Vilnius), and no new bank or specialised bank licences were issued in 2023. However, in mid-February 2023, Saldo Bank UAB commenced banking activities (it was granted a specialised bank licence in October 2021). As of 1 February 2024, UAB Medicinos bankas changed its name to UAB Urbo bankas. 

The third-biggest bank is Luminor Bank, the joint venture of Nordea Group (S) and DNB Group (N). In 2019, the process of reorganising Luminor Bank and Citadele Bankas into branches was complete. Following the completion of the consolidation process of Luminor Bank, its Lithuanian licence was revoked in January 2019. Starting from 2019, its activities have been carried on by the Lithuanian branch of Luminor Bank, headquartered in Estonia. The licence of Citadele Bankas was also revoked in 2019. The bank continues to operate as the Lithuanian branch of its Latvian parent company Citadele Banka. 

As in Estonia and Latvia, Swedish banks dominate the Lithuanian banking sector. While Bankas Swedbank (formerly Hansabankas) is the bigger player in the other 2 Baltic states, SEB Bankas is the market leader in Lithuania in terms of overall market share, though Bankas Swedbank has more retail clients. In 2023, SEB Bankas and Swedbank owned 52% of the banking sector’s total assets. According to the BoL, the banking sector remains concentrated, but new market participants are consistently increasing their assets, thereby creating more competition for banks that have been operating for a longer period.

In October 2021, having received an approval from the ECB and other supervisory authorities, the shares of Swedbank Group banks in the Baltic states were transferred to Swedbank Baltics, a holding company registered in Latvia that was established at the beginning of 2021. Subsidiary groups of Swedbank AB (Sweden) from all three Baltic States were consolidated in the new entity. The holding company Swedbank Baltics consolidates Swedbank group entities from Latvia, Lithuania, and Estonia.

In May 2020, Revolut launched as a licenced bank in Lithuania, enabling its customers in the country to upgrade from e-money accounts to deposit-protected bank accounts. Revolut received its European banking license in late 2018 from the Bank of Lithuania and the European Central Bank (ECB). By 2022, Revolut Bank UAB became the third largest bank in terms of assets due to the reorganisation of group companies in Lithuania in H2 2022. At the end of 2023, Revolut had a market share of 19.6%.

1 – Main Lithuanian Commercial Banks in 2023

Note: NCB figures for assets may differ from those published by individual banks.
Note: Revolut Bank UAB gained a banking licence on 13.12.2021
Source: Bank of Lithuania.

SEB Bankas is SEB’s biggest bank in the Baltics, with responsibility as well for operations in Estonia and Latvia. In 2023, it reported 19 branches in Lithuania. As of 2023, SEB had approximately 4 million private customers in Sweden and the Baltic countries. Of these, around 1.3 million are home bank customers in Sweden and more than 1 million in the Baltic countries. The division has 61 branch offices in the 3 Baltic countries and serves more than 1 million private home bank customers and 104,000 home bank customers among small and medium-sized companies. Digital services, such as mobile applications, electronic document signing and remote video advice, are increasingly used by customers.

SEB initially entered Lithuania by the purchase of Vilniaus Bankas. In March 2019, the bank issued a specific statement confirming its continued commitment to banking in the Baltics, following the decision by other Scandinavian banks to discontinue such operations. 

2 – SEB in the Baltic States (2023)

Note: asset figures have been converted from SEK at an exchange rate of 1EUR: SEK 11.4788
Source: SEB.

Bankas Swedbank, having established Hansapank in Estonia as its regional headquarters, increased the scale of its Lithuanian operations in 2001, when Hansapank won the privatisation tender of Lietuvos Taupomasis Bankas (LTB), the state savings bank network and largest retail bank in Lithuania. In December 2001 Hansapank merged LTB and its existing operations into a single bank, now rebranded as Swedbank. In 2023, Swedbank operated 43 branches, 86,000 corporate customers, and 1.6 million private customers in Lithuania, along with 406 ATMs.

In September 2015, Swedbank concluded an agreement with Danske Bank in Lithuania and Latvia on acquiring Danske Bankas retail banking business. The transaction was closed in June 2016. 

In February 2021, Swedbank established a Baltic subsidiary in the form of a holding company headquartered in Riga, where ownership of the subsidiary banks in Estonia, Latvia and Lithuania was placed. The measures, which were the result of a corporate governance evaluation, are aimed at strengthening governance both on a group level and in the Baltic subsidiaries. 

Luminor Bank – In September 2016, DNB Group (N) and Nordea Group (S) agreed to combine their operations in Estonia, Latvia and Lithuania, creating a leading bank in the Baltics with strong Nordic roots. The joint venture was renamed as Luminor Bank. The merger positioned Luminor Bank as a top 3 player in the Baltic banking market with a 17% of the lending market as of 2022. 

Luminor was previously owned by Nordea Group (56%) and the Norwegian DNB Group (44%). In September 2018, private equity investor Blackstone agreed to acquire a 60% stake in Luminor Bank for a total of $1 billion. Both Nordea Group and DNB Bank retained a 20% stake each. In December 2021, Blackstone acquired 8.45% of Luminor from Nordea. In September 2022, Blackstone acquired Nordea’s remaining 11.6% interest. As a result, Blackstone now owns 80.05% of Luminor, and DNB will continue to own the remaining 19.95%.

At end-2023, Luminor Bank had 470,000 customers and 12 client service centres in Lithuania.  

In November 2021, Luminor signed a contract for the acquisition of part of Danske Bank’s corporate portfolio worth approximately €40 million. The portfolio consists of Danske Bank’s corporate loans in Lithuania. Danske is withdrawing most of its business activities from the Baltics except for the Lithuania Danske Shared Services Centre.

Danske Bankas – In September 2015, Danske Bank concluded an agreement with Swedbank Lithuania on selling its retail business. Danske Bank announced its intention to focus activities in the three Baltic countries on corporate and private banking. The transaction was approved by the Competition Council of Lithuania in March 2016. The service transfer affected more than 86 000 private “Danske Bank” customers in Lithuania. In 2018, Danske Bank discontinued its banking operations in the three Baltic states. However, Danske Bank’s shared services centre in Lithuania, which undertakes a number of administrative functions for Danske Bank, continues its operations there.

Cidatele Bankas is the Lithuanian subsidiary of Citadele Bank in Latvia, which was nationalised in 2008 and renamed Citadele, from Parex, in August 2010. In 2017, Citadele Bank was owned by an investors group led by Ripplewood Advisors and the EBRD (see Latvia profile). As of 2023, the bank has one branch in Lithuania.

Šiaulių Bankas – In May 2013, Ukio Bankas stopped its bank business due to bankruptcy. Subsequently, Šiaulių Bankas re-opened the 63 office outlets of Ūkio bankas and resumed services to the former Ūkio Bankas’ clients. In 2023, the bank operated 56 branches across Lithuania and reported that more than 30,000 new private and corporate clients started using the Bank’s services in 2023, and that the total number of active clients exceeded 180,000. In 2015, Šiaulių Bankas absorbed the bank assets and liabilities of Bankas Finasta. 

Digital Challenger Banks

A number of digital challenger banks have entered Lithuania, e.g. N26, Revolut and Wise. They already have a clear Open Banking strategy in place. 

In parallel, many Lithuanian banks co-operate and partner with trusted digital payment providers and fintechs to prepare for the Open Banking ecosystem, enrich their digital banking services, and to offer additional mobile banking app features. The companies listed above represent the major European players currently based in Lithuania: others include Shift4, Revel, Simplex, de Vere e-money, transferGo InstaREM (see “e-Money”, below) and lender (P2P loans). The Lithuanian government claims to offer the fastest office set-up (two months), e-money licenses (five months) and “light” banking licenses (nine months) in the EU, aiming to attract new FinTechs.

According to Invest Lithuania, the Lithuanian FinTech industry continued to experience rapid growth in 2021, with homegrown companies and international players, such as Mambu, Curve, and Ria all leveraging the country’s multi-disciplinary talent pool, innovative infrastructure, and progressive regulation. In 2022, the Fintech ecosystem in Lithuania exhibited resilience and flexibility in the face of adversity and volatility in spite of the geopolitical tension. Lithuania hosted 276 FinTechs in 2023, most of which are focused on payments, financial software, digital banking and lending activities. The number of fintechs operating in Lithuania increased by 5%, reaching 276 companies by the end of 2023. Lithuania claims to be the largest fintech hub in the EU in terms of licensed companies, with 140 fully passportable fintech licences issued.

Regulatory Sandbox – The Bank of Lithuania has been active in re-shaping the country’s regulatory framework to create a favourable environment for start-ups wishing to take advantage of EU passporting rights. 

In June 2017, Lithuania bolstered its credentials as an EU-friendly destination for start-ups with the opening of a regulatory sandbox for aspiring firms to test their products ahead of commercial roll out. 

In January 2018, it was announced that domestic and foreign companies would be able to develop and test FinTech blockchain solutions in the regulatory and technological sandbox LBChain, which was created by the Bank of Lithuania. The regulatory sandbox of the Bank of Lithuania was created to pave the way for faster and easier access to new financial solutions. In May 2020, the Bank of Lithuania completed the research phase of the LBChain project. In 2020, a minimum viable product (MVP) for a unique sandbox was developed within the framework of the LBChain project. In 2020, the regulatory sandbox had its first graduate upon the end of the testing period of a P2P insurance platform, which allows its members to form groups of peers in order to protect themselves against losses.

In March 2018, the Bank of Lithuania, and the Monetary Authority of Singapore (MAS) agreed to work together to support the development of the FinTech ecosystems and encourage greater financial innovation in the two countries. Agreements were also reached with the National Bank of Ukraine and the Astana Financial Services Authority (Kazakhstan) to expand the global sandbox initiative. 

In April 2018, it was announced that Lithuania would establish a blockchain-based system, the Newcomer Program, for overseas businesses to remotely register and manage their company in the EU as ‘Virtual Limited Liability Companies’. In 2019 the Bank of Lithuania launched a smart e-licensing tool, enabling potential market entrants to remotely apply for a licence. 

In 2020, the Newcomer Programme was used by 108 potential market participants from more than 30 foreign countries. The majority of them were interested in acquiring an electronic money or payment institution licence (79% of all those interested). In 2020, the Bank of Lithuania issued 35 FinTech authorisations.

According to BoL 35 FinTech companies were authorised or included in public lists throughout the course of 2020; compared to 2019, the number of issued licences increased. The said FinTech companies included a specialised bank, electronic money and payment institutions as well as crowdfunding platform and P2P lending platform operators. Having met with more than 108 potential market participants to discuss the possibilities of setting up in Lithuania, currently the Bank of Lithuania is assessing more than 42 applications.

With a view to making Lithuania the FinTech hub in the Nordic-Baltic region, the Bank of Lithuania created a FinTech conducive environment that attracts new market players and encourages product development in the country. The Bank of Lithuania has already launched a one‑stop shop, allowed foreign citizens to submit documents necessary for obtaining authorisation in English, published a Licensing Guide in both Lithuanian and English, provided practical advice on how to prepare for authorisation, and prepared a “roadmap” presenting the key stages of the licensing process. The Bank of Lithuania’s website has a section dubbed the Newcomer Programme, which presents key information for new market entrants in a concise and clear manner.

In 2020, the Bank of Lithuania’s regulatory sandbox had its first graduate. UAB Workpower was testing its P2P insurance platform, which is based on the principles of the sharing economy, where its members form groups of peers in order to protect themselves against losses, make their own decisions on loss compensation using pooled funds, and get back the unused ones. 

In May 2022, Lithuanian fintech start-up Kevin secured funding of €61 million to develop Open Banking solutions. The Series A round was led by Accel, with participation from Eurazeo and previous investors that include OTB Ventures, Speedinvest, OpenOcean and Global Paytech Ventures. Kevin provides a developer-friendly payments infrastructure accessible via an API, giving businesses the ability to accept payments directly from banks. As of December 2024, Kevin has faced significant challenges leading to its insolvency. In September 2024, the Vilnius District Court declared Kevin insolvent, initiating bankruptcy proceedings. The Bank of Lithuania revoked Kevin’s payment institution license, citing the company’s failure to provide audited annual reports by the stipulated deadline.

Contis Group, a European alternative banking, and payments solutions group, received an e-money licence in Lithuania in 2019. Contis is a pan-European e-money institution, regulated by the FCA (UK), and issuer of VISA cards and VISA certified processor. For major brands across the EEA, it provides alternative banking, and full ‘end-to-end’ VISA card payment solutions, including tailor-made APIs. Contis services are being used by clients in the Nordic and Baltic region, e.g. by airline airBaltic. 

In setting up operations in Lithuania, Contis joins a number of international fintech providers who have recently moved to Lithuania. These include Revolut, a UK-based FinTech start up, the Chinese international settlement giant – International Business Settlement – and the payment platform developer, Moneta International. 

In late 2023, Contis was fined €840,000 by the Bank of Lithuania for failing to comply with money laundering and terrorist financing prevention requirements, as well as information security and business continuity risk management.

On September 20, 2024, Solaris announced the decision to discontinue major parts of its Electronic Money Institution (EMI) business, which was formerly known as Contis. This decision was attributed to challenging market conditions, loss of key partners, and unsustainable operations.

IBS Lithuania – In March 2017, Bank of Lithuania granted a non-restricted electronic money institution license with EU passporting to IBS Lithuania, the European branch of a Hong Kong-based FinTech company, International Business Settlement Holdings Limited. 

IBS Lithuania provides e-money issuance and redemption as well as payment services. IBS Lithuania has already agreed with a number of European financial institutions to provide the real-time multi-currency payment settlement services between Europe and China. From June 2017, IBS Lithuania enables European businesses to open IBAN-based accounts that allow for low-cost and real-time payments to and from mainland China. In 2020 IBS Lithuania’s total safeguarded customer funds amounted to €16.57 million. UAB IBS Lithuania is authorised and regulated by the Bank of Lithuania.

Revolut, a UK-based FinTech start-up, began using IBAN-format for account numbers that could be used by financial institutions to credit funds into the beneficiary’s account in 42 European countries, according to the company. Lithuanian IBAN account numbers were assigned to Revolut customers so that they could have a euro account number in any country in Europe. By November 2024, Revolut claimed to have surpassed 50 million retail customers globally and by October 2023, Revolut claimed 465,000 retail customers, 173,000 of them were in Vilnius – the capital city of Lithuania.

In December 2018, the company was granted a pan-EU banking license, and in May 2020, Revolut launched banking operations in Lithuania. 

In December 2021, Revolut was granted a Lithuanian banking licence by the European Central Bank and subsequently shifted more than 1 million UK banking and card accounts to its Lithuania operation, stating that the impact of Brexit had led to the move.

Digital Banking 

All Lithuanian retail banks offer online banking services and mobile banking apps to their clients. Services available include balance and transaction reporting and payment initiation. According to Eurostat, 76%% of all Lithuanian bank clients were e-banking users by end-2023.

Services available include balance and transaction reporting and payment initiation. Some banks offer international cash management services. 

There is no bank-independent electronic banking standard in Lithuania; each bank offers its own proprietary system for corporate banking purposes. 

Mobile banking apps with added mobile money transfer services include N26, Revolut and PayPal. 

Lithuanian banks generally report high levels of penetration of internet banking services among their client bases. The presence of leading Nordic banks has supported the rapid development of Lithuania’s e-banking market. The three biggest banks in Lithuania, SEB, Swedbank, and Luminor Bank, are reported to have a combined market share averaging 90% in both the online banking and mobile banking market segment. By end-2023, the Association of Lithuanian Banks (LBA) reported a total of 24.02 million internet banking users from all banks and an estimated 1.81 million users of SMS banking. 

3 – Internet Banking Users in Lithuania

Source: Association of Lithuanian Banks (LBA).

During 2020, SEB Bankas said it delivered 28,000 remote consultations to private and corporate clients – twice as much as in 2019. Instead of coming to the bank’s branch, customers were served remotely, with the bank receiving 44% more customer calls and messages through digital channels. It also became common for customers to register online for a visit to a bank branch, and companies were able to sign service contracts remotely.

Introduced in 2017, SEB’s mobile app underwent further improvements and updates, enabling customers to make transfers using only a phone number of a recipient. More than 380,000 individuals and corporate entities were active users of SEB’s mobile app in 2020.

In 2021, SEB introduced an investment AI-driven robot assistant to the market, after which the number of customers investing into the funds of SEB increased by 34%. 

During 2022, business customers of SEB conducted e-commerce turnover several times larger compared to the same period in 2021, while payments by various electronic payment modes increased by 84% from 2021. In 2022, SEB Bank noticed that both businesses and residents are increasingly making payments in the SEB mobile app: the number of transactions has increased by 24% compared to 2021, and turnover by as much as 51%. Currently, almost 480,000 people use the SEB mobile application in Lithuania. On average, customers use the app at least once a day. In addition, the Bank’s customers wanted to consult remotely on both daily and complex financial questions – in 2022, the Bank provided 15% more remote video consultations for business customers. In 2023, SEB Bank continued to enhance its support for business customers in the e-commerce sector. The number of transactions for payment via payment initiation services grew by 4% compared to 2022. Online card payments saw a more substantial increase, growing by 36% over the same period.

Swedbank Lithuania also launched several new payment solutions in 2020, including Google Pay using selected Android devices. Swedbank Lithuania also introduced ALIAS (also known as Proxy) payments, where the user’s phone number is linked to their bank account, facilitating real-time transfers with the help of the recipient’s phone number.

In 2020, one of Swedbank’s main improvements for customer convenience during the COVID-19 pandemic was the introduction of remote private customer onboarding, giving those over 18 years of age access to the bank’s services by using a valid digital ID tool and without having to visit branches. 

As of 2023, Swedbank reported that the number of active users of the app reached 1 million and their activity increased. The share of sales in digital channels was 77%, compared to 73% in 2022. 

During 2020, throughout the COVID-19 pandemic, Luminor urged customers to use digital services as much as possible. The remote onboarding service, which already operated in Latvia, was extended to Lithuania and then Estonia. Online meetings, video meetings, and a pre-booking system were introduced for Customer Service Centres to increase the share of services provided remotely. By the end of 2020, four out of ten customers were onboarded remotely. 

During 2021 Luminor continued digital channel development with the rollout of new functionalities and products to its customers, including the expansion of its e-commerce gateway service and e-commerce acquiring capabilities. In December 2021 it introduced Google Pay, Apple Pay, Garmin Pay and Fitbit Pay, with around 20,000 active cards added.

In 2020, Citadele reported that active customers reached an all-time high of 326,000 clients across all three Baltic states, a growth of 4% from 2019. Mobile app users and internet bank customers increased by 9% and 1% respectively to reach 143,000 active mobile app users and 195,000 active internet bank customers. As of 2020, Citadele Banka reported 47,999 active customers in Lithuania, compared to 46,000 in 2019.

In 2023, Cidatele announced that the number of active customers had reached 378,000 by December 2023, a 1% growth from 2022. The number of active mobile app users reached 257,000 in 2023, a 9% increase from 2022.

During 2020, Šiaulių Bankas reported that the number of digital channel users was increasing rapidly, with more processes in the bank’s daily activities being automated. Due to the COVID-19 pandemic decreasing physical customer visits and increasing need for remote services, a remote identification service was introduced for customers. The number of electronic channel users increased by 4% over 2020 to more than 194,000 and the number of logins increased by 6%. 

About Open API Standards

In June 2017, The Berlin Group, the European payments interoperability coalition of banks and payment processors with membership comprising bank backed ACHs and industry bodies, announced it would push a single standard for API access to bank accounts (XS2A) compliant with the PSD2 regulation. 

The Berlin Group says its NextGenPSD2 Initiative provides a harmonised API standard for accessing bank accounts. Built as an ‘Access to Account Framework’, The Berlin Group says the standard offers operational rules and implementation guidelines with detailed data definitions, message modelling and information flows based on RESTful API methodology. 

As of the beginning of 2021, the Berlin Group NextGenPSD2 was implemented in all EU countries, in several non-EU countries in Europe and in countries outside Europe who are focused on maintaining reachability and compatibility with the European market. Around 80% of European banks and hundreds of third-party providers (TPPs) have implemented the Berlin Group NextGenPSD2 Framework. In 2021, the group was migrated to the Open Finance task force to explore use cases of Open Banking schemes and Open Finance schemes.

Among others, European Open API sets include Open Banking UK, Swiss Corporate API, and STET Open API (F, B). 

According to the Bank of Lithuania, authentication services via banks had been provided to third parties in Lithuania long ago but were not known as Open Banking. The provision of payment initiation services in Lithuania started before PSD2 was adopted. The technology used to provide these services is now insufficient to guarantee strong customer authentication, and the implementation of PSD2 became a foundation for tackling legal and technical issues.

In November 2018, the Bank of Lithuania launched a public consultation on Open Banking. Subsequently a financial sector API register was set up, while a working group of the Payments Council had explored the possibilities of the development of Open Banking. As of 2020, four Lithuanian banks, two foreign banks, one credit union, and six payment institutions were members of the API register. 

The Payments Council identified areas for the development of Open Banking related to the creation of new financial services and invited payment service providers to continue developing services aimed at evaluating client creditworthiness, combating fraud, and preventing money laundering as well as developing skills for the analysis and management of personal finance. In 2021, the Payments Council continued to examine the possibilities of providing access to data stored in public registries and ensuring access to cash services in Lithuania. In 2023, the Payments Council focused on encouraging non-cash payments in small businesses, ensuring access to cash and advancing Open Banking.

As of 2020, the development of new solutions via the Open Banking (API) in SEB’s systems in relation to Open Banking enabled the bank’s clients to view the balance and statements of their accounts with the bank at other financial service providers’ internet banks, mobile apps and other channels, also, to initiate payment orders from such accounts. SEB’s clients became the first in Lithuania to be able to manage their accounts opened with the bank through another bank’s e-banking system. 

Luminor launched its e-commerce gateway for Mass Business customers in all three Baltic states. The e-commerce gateway provides card acquiring services for accepting VISA and Mastercard cards and uses the Open Banking APIs of major banks to allow account-to-account payments to be acquired.

As of 2023, there were 21 third-party Open Banking providers registered in Lithuania, along with 11 banks and account providers, 24 bank APIs and 18 API aggregators. 

Payment Services

In Lithuania, the law on payment services adopted the EU payment services directive (PSD) and the EU interchange fee regulation (IFR). Lithuania has adopted the new PSD2 – effective from 2018. 

In 2024, the more than 300 different payment services offered in Europe can be grouped into: 

• Card brands and card types
• E-Money and prepaid products by issued brand
• Account-based payment services by issued brand, e.g. IBAN-based SCT/SDD services
• Advanced payment services. e.g. wallets by issued brand
• Digital payment services, e.g. digital scheme wallets by issued brand 

 

Card Brands and Card Types

At present, there is no domestic debit card scheme in Lithuania, and all retail banks issue debit cards and credit cards with Mastercard or VISA brands. The EMV migration of cards is complete since end-2011. 

The domestic eLitoCard card issued for several years by Bankas Snoras has been replaced by Mastercard cards. In 2009, domestic debit cards were phased out. 

Lithuanian card products like consumer cards, commercial cards and purchasing cards range from classic cards to gold cards and platinum cards. Additional card features (e.g. picture cards, bonus points, PIN selection at ATMs, cashback and card control by SMS notification) are used to attract cardholders. Also, individual picture cards and collector cards are issued on demand. 

From July 2023, banks and other card issuers will no longer issue Maestro cards. Instead, they will need to issue Debit Mastercard. Maestro was launched in 1991, and it was the world’s first debit card that could be used via an online network. About 400 million Maestro cards are in circulation worldwide, mainly across Europe. However, Maestro is not enabled for the demands of e-commerce and cannot be used for online or in-app payments, hence the decision to phase it out in favour of Mastercard Debit products. Visa announced that Electron cards will be phased out globally in 2024. The features of the Visa Debit card have been modified to match the features of the Visa Electron card.

Debit cards issued are Debit Mastercard, and VISA Debit cards. Contactless Debit Mastercard cards are the new mainstream. There are no V PAY cards in issue. 

Credit Cards issued are cards branded VISA or Mastercard. There are no American Express, JCB cards and no Diners cards in issue. 

Prepaid Cards – A few Lithuanian banks issue virtual cards for internet use. 

Co-branded cards – In Lithuania, only a few co-branded card products are in circulation. Co-branded cards are based on the international card brands Mastercard, VISA, Maestro or Electron. 

Lithuanian banks issuing co-branded cards together with their non-bank partners include SEB Bankas, Bankas Swedbank, and a few others. 

Contactless Cards and form-factors

All Lithuanian banks issue contactless cards. Luminor Bank and Bankas Swedbank issue contactless Debit Mastercard cards replacing their Maestro and Electron debit cards. 

Predefined contactless limits – Contactless payments for purchases below a predefined limit are without PIN or signature and without transaction receipt. In Lithuania, from October 2017, the contactless limit for payments without PIN/signature was set at €25 for cards with PayPass or payWave function (previously €10). 

In March 2020, in response to the COVID-19 pandemic, the contactless limit was raised to €50 to encourage more non-cash transactions. According to the Association of Lithuanian Banks, as of 2022, payments up to €25 comprise around 85% of all payments made by contactless cards and payments up to €50 comprise 95%.

According to the Bank of Lithuania, payment cards are the second most popular payment instrument in both Lithuania and the euro area as a whole. Over one in two card payments in Lithuania are made using contactless technology (in the euro area – more than one third of all payments).  

In 2020, consumer habits changed due to the pandemic, which has accelerated cashless payments: 27% of survey respondents in Lithuania stated that they were paying less with cash (compared to 40% in the euro area), whereas more than one third of the respondents in the country indicated that they had started using contactless cards more often (in the euro area – 40% of the surveyed). 

The number of Lithuanians who indicated that they would continue to pay less with cash after the pandemic has increased to 61%, as compared to 90% of the respondents in the euro area. However, the option to pay with cash remains important for 55% of the respondents in the euro area and 49% of the surveyed in Lithuania.

Interchange Fee Arrangements

International and Intra European Non-EEA Interchange Fees are set by the members of the international card schemes to be applied in case of cross-border transactions or foreign cards used in Lithuania, respectively. The effective rates of Mastercard and VISA can be found on the respective Mastercard and VISA websites. 

In Lithuania, domestic Merchant Interchange Fee (DMIF) rates for Lithuanian cards is defined by Mastercard and VISA, respectively. The interchange fee regulation 2015/751/EU applies for Lithuanian card business. 

The interchange fees for domestic card-based payment transactions on consumer cards are capped as follows: 

• Credit card payments capped at 0.30% 
• Debit card payments capped at 0.20% 

 

Commercial credit cards, such as Mastercard Corporate and Mastercard World Preferred, have higher interchange fees in Lithuania, typically around 1.70% for contactless transactions.

American Express – As a result of the EU regulation of interchange fees (IFR), American Express elected to exit all bank licensing arrangements in the European Union. This means that they have terminated all licenses with its existing EU partners, stopped issuing new cards and closed down all operations directly related to bank licensing. Over the course of 2019, American Express credit cards issued under independent operator agreements were rendered invalid in all countries of the European Union. Various banks that have up to now had exclusive licensing contracts with American Express have already responded accordingly and provided their clients with the opportunity to switch to other card brands. 

From 2020, American Express Payments Europe is now the sole issuer and acquirer of American Express cards in Europe, including Lithuania. However, American Express Payments Europe continues its local sales partner arrangements with local acquirers enabling the use of American Express cards at ATMs and POS terminals. 

It’s challenging to find retailers that accept American Express in Lithuania.

E-Money 

In Lithuania, the law on e-money services has adopted the e-money directive of the EU (EMD). However, there are no cards with an e-money function in Lithuania. They have not been issued since 2008. 

For several years now, Lithuania has been the leader in mainland Europe by the number of licensed electronic money institutions. In 2023, there were 82 e-money institutions (EMIs) resident in Lithuania (2022: 84, 2021: 87, 2019: 67, 2018: 49, 2017: 29, 2016: 12, 2015: 6, 2012-14: 2), including PaySera, Perlo Paslaugos, Lietuvos Pastas, and mobile network operator Tele2. 

At the end of 2023, there were 125 e-money institutions and payment institutions on the public lists (82 EMIs and 43 PIs), compared to 131 (84 EMIs and 47 PIs) at the end of 2022. In 2021, the amount of payment transactions executed by EMIs, and PIs exceeded €190 billion. The total amount of payment transactions executed by the sector amounted to €75.75 billion at the end of 2023, 1.6 times more, compared to 2022. Companies generated revenues from licensing activities of €503.97 million, i.e. €361.60 million (3.5 times) more than in 2020: EMIs accounted for 92% and PIs earned 8% of these revenues. One market participant accounted for 49% of the market in terms of revenues from licensed activities and 58% of the market in terms of the amount of payment transactions. 

Further, other EMIs authorised in other EEA member states have provided notification of plans to operate in Lithuania under the EU passport system. 

Additionally, software-based e-money e-/m-wallet services are also offered by international payment service providers and e-wallet issuers from the EEA region. They provided notification of operating in Lithuania under the EU passport system. 

Prepaid Products – paysafecard (A) entered Lithuania and launched its prepaid product, paysafecard. 

Digital Account-to-Account Payment Services 

In the Yearbooks, account-based payment services are classified as IBAN-based payment services in SCT/SDD format offered by banks or by independent payment initiation service providers (PISP). 

Credit transfers are used for both high-value corporate and low-value retail payment transactions. They can be paper based or automated. Electronic credit transfers are used by companies for salary and supplier payments. Paper-based credit transfers are commonly used for non-recurring retail payments. 

Lithuania is a part of the SEPA initiative for EUR-denominated retail payments. From 2015, all domestic banks participate in the SEPA Credit Transfer Scheme. 

Direct debits were available in Lithuania and used for low-value recurring payments such as utility bills. The majority of debit transactions in Lithuania are intra-bank transactions. 

After Lithuania joined the Single Euro Payments Area (SEPA) on 1 January 2016, the local direct debit service no longer corresponds to SEPA requirements and, thus, was replaced by e-invoice services. 

SEPA Direct Debit (SDD) Schemes were launched on 2 November 2009. Banks in Lithuania were not required to accept SEPA direct debits until 1 January 2016. From 2016, the leading banks participate in the SEPA Direct Debit Scheme. 

Instant payments (SCTINST) Instant payments (SCTINST) is the IBAN-based immediate payment scheme in Europe, officially launched in November 2017. It makes funds immediately available to the beneficiary – compliant with existing SCT infrastructure. The regulators will require all banks to offer Instant Payments from 2018. 

Among others, the characteristics of SCTINST include an initial maximum of €15,000 with the funds made available on the beneficiary’s account in less than ten seconds, 24/7/365 real-time processing, and immediate refunds in the case that the SCTINST payment was not successful. From July 2020, the maximum amount for instant payments will be €100,000. 

Chaired by the ECB, in 2014, the Euro Retail Payments Board (ERPB) identified the need for a pan-European instant euro payment solution. In April 2016, EBA Clearing started the SCTINST project with more than 40 large European banks involved. In November 2016, the European Payments Council (EPC) published the SCTINST scheme and SCTINST rule books version 1.0 while the ERPB provided the governance model. In November 2017, EBA Clearing completed the pan-European instant payments infrastructure, RT1. 

SEPA credit transfers and direct debits can be settled on a same-day or next-day basis. In 2023, about 50% of all IBAN-based payments in Europe were processed intra-day, or even immediately inside of the same bank group. Potential first use cases for SCTINST in Lithuania may include P2P, mobile banking apps, online payments, and B2B. 

As of May 2024, 2,295 banks from 36 European countries had registered for the SCTINST scheme. This represents 63% of all SCT scheme participants.

As in many European countries, bank transfers have been adopted for online payments, enabling consumers to pay direct from their bank account as an alternative service to payment cards.

In January 2018, The Bank of Lithuania selected Italian processor SIA to access RT1, the pan-European instant payments infrastructure that is operative as of 21 November 2017. Thanks to SIAnet, the fibre optic network with high speed and low latency stretching over 170,000 kilometres, the Bank of Lithuania was one of the early users to join EBA Clearing’s system. 

In many European countries, bank transfers have been adopted for online payments, enabling consumers to pay direct from their bank account as an alternative service to payment cards. 

Since the emergence of instant payments, roughly 80% of payment accounts in Lithuania are reachable for instant payments. Since 2019, instant payment services have been available for customers of SEB Bankas, Swedbank, Citadele Banka Lithuanian branch, Šiaulių Bankas and Paysera. The Lithuanian branch of Luminor Bank began providing this service in 2020. Major banks offer instant payments as a standard payment service, with pricing of instant payments for private customers usually the same as typical credit transfers.

In 2020 the largest commercial banks operating in Lithuania started using the proxy look-up service provided by the Bank of Lithuania. There will be no need for payers to enter the number of the beneficiary’s account held with another bank in Lithuania, as only their mobile phone number will be required.

The popularity of instant payments in the CENTROlink system continued to grow in 2023 – one third more instant payments were executed than regular payment orders. In 2023, instant payments accounted for 55% (compared to 46% in 2022) of all transfers, while credit transfers constituted 42% (down from 48% in 2022) of all transfers. In total, there were over 228.3 million SEPA payments processed in the system in 2023 (compared to 276.3 million in 2022). Among the 26 European countries with SEPA instant payments, this ratio stood at 11% at the end of 2021. In 2022, the share of instant transfers executed by Lithuanian PSPs accounted for around 60% of all interbank credit transfers.

At the end of 2023, 65 Lithuanian and EEA credit institutions, PIs and EMIs were able to provide instant payment services to their customers via CENTROlink. CENTROlink is a payment system operated by the Bank of Lithuania, providing the gateway to the Single Euro Payments Area (SEPA). At the end of 2023, 143 PSPs (148 in 2022) from 19 EEA countries were using CENTROlink services while 65 PSPs were able to provide instant payment services. Via its infrastructure, the Bank of Lithuania provides technical access to SEPA for all types of payment service providers (PSPs) – banks, specialised banks, credit unions, electronic money or payment institutions – licensed in the European Economic Area (EEA).

In order to accelerate the development of instant payments, the EC proposed a package of measures in 2022. It included setting requirements for PSPs for the provision of the instant payments service, shaping pricing compared to traditional SEPA transfers, strengthening consumer protection and optimising the sanction screening when processing instant payments. In 2021, the EC consulted market participants, competent supervisory and regulatory authorities, and other stakeholders on measures.

Foreign payment initiation service providers (PISPs) offering cross-border online credit transfers in the country include Inpay (DK), Trustly (S) and Klarna (S). 

In 2023, 43 payment institutions operated in Lithuania. Authorised in another EEA member state, cross-border PISPs have provided notification of operating in Lithuania under the EU passport system. 

Advanced Payment Services

In the Yearbooks, advanced payment services are classified as online wallets, e-wallets, and/or mobile wallets with any type of payment service chosen by the wallet user to complete the payment. 

In selected Lithuanian online shops, the wallets PayPal, Skrill and SumUp are offered as payment means. 

In 2014, Lithuania-based mobile payments provider WoraPay launched a white label mobile payments app allowing users to pay mobile for goods and services. WoraPay was later succeeded by Paysolut and subsequently acquired by global payment service provider SumUp in February 2021. In 2019 SumUp was granted an e-money institution licence by the Bank of Lithuania.

PayPal – PayPal is available in Lithuania. As of end-2023, PayPal reported more than 431 million active customer accounts globally, down 0.91% from 435 million in 2022.  During 2022, PayPal added approximately 8.6 million net new active accounts, ending the year with 435 million active consumer and merchant accounts. PayPal’s total payment volume increased to $1.52 trillion in 2023 (up 11.7% from $1.36 trillion in 2022) and customer engagement grew to an average of 58 transactions per active account, driving 13% growth in transactions per active account at the end of 2023.

During 2020, with consumers worldwide embracing digital wallet capabilities, the company launched several related services including QR Code Checkout, Buy Now Pay Later, Crypto purchasing and Xoom direct transfers to bank accounts and debit cards. 

In June 2018, PayPal continued its shopping spree with a $400 million cash deal to acquire e-commerce platform Hyperwallet. The acquisition followed deals to buy Venmo, Xoom, Sweden’s iZettle (renamed Zettle) for $2.2 billion and AI-based merchant marketing outfit Jetlore, as Paypal bids to extend its reach to all corners of the payments market. 

In May 2022, PayPal Ventures invested in Modulr, an embedded payments platform for digital businesses, as part of a $108 million Series C funding round led by General Atlantic, Blenheim Chalcot, Frog Capital, and Highland Europe. Modulr delivers payments infrastructure for over 200 top-tier customers, including Revolut, Wagestream, Sage and BrightPay, and processes an annualised transaction value of more than £100 billion. 

In 2023, PayPal is exploring the sale of Xoom, its international money transfer subsidiary, in a bid to cut costs and focus on high-growth business areas. Also, Stax Payments – an all-in-one payment provider for businesses – announced its partnership with PayPal in July 2023. This partnership will allow PayPal’s users to easily make payments with more than 20,000 merchants of Stax through a fast checkout process as well as new payment options such as Buy-now-pay-later solutions.

In 2023, PayPal launched its own US dollar-denominated stablecoin, PayPal USD (PYUSD), which is fully backed by US dollar deposits, short-term US treasuries, and similar cash equivalents and designed for digital payments and Web3. Eligible US PayPal customers who purchase PayPal USD will be able to transfer the token to external wallets, send person-to-person payments, fund purchases at checkouts supported by PayPal, and convert cryptocurrency holdings to and from PayPal USD.

In January 2024, PayPal launched AI-powered features to drive personalised offerings for both merchants and customers based on the data it possesses. These features include Smart Receipts (for merchants) which predicts what shoppers may want to buy next from the merchant. The merchant can then offer personalised recommendations, and cashback offers on this receipt. A major feature for users is CashPass which will use give users personalized cashback offers based on an AI analysis of their spending activity.

In March 2024, PayPal launched a complete suite of payment processing tools for online small businesses in the UK, Canada, and across more than 20 European markets. The PayPal Complete Payments package enables small businesses to accept an expanded range of payment instruments including PayPal, buy now pay later, Apple Pay, Google Pay, credit and debit cards, and alternative payment methods from around the world. By April 2024, PayPal added new features to its complete payments solution for small businesses to enable small businesses to accept a range of payments including PayPal, Venmo and PayPal Pay Later products. PayPal also gave small businesses access to four new features to help them drive payment acceptance and enhance how they run their business, and this will include Apple Pay as a checkout option.

Amazon Pay – In 2016, Amazon (US) launched its checkout payment service, Amazon Pay, enabling customers to pay for goods and services in participating third-party merchant websites. All active Amazon account holders can use Amazon login and password at the checkout. More than 50 million customers have used Amazon Pay to make purchases globally, with more than half of these coming from Amazon Prime Members. 

Digital Payment Services

In the Yearbooks, digital payment services are classified as card-based payment services using EMV tokenisation security on the internet combined with HCE NFC technology in the case of contactless payments at POS terminals. 

As of mid-2024, the Click to Pay online payment checkout service was available, replacing the previous MasterPass and VISA Checkout services respectively. Click to Pay is a joint service between Mastercard, Visa, Discover and American Express, enabling consumers to make secure one-click payments without having to enter card details or passwords online. 

Contactless payments on cards using Apple Pay, Samsung Pay, or Google Pay (previously Android Pay) made by foreign users at contactless POS terminals in Lithuania are processed as payments on contactless cards. 

Global contactless transaction values will reach $10 trillion by 2027, up from $4.6 trillion in 2022, with contactless mobile and wearable payments expected to grow by 221% and contactless card payments by 119% over the same period.

Contactless ticketing spend will increase by more than 440% globally between 2022 and 2027, with growing prominence and support for OEM pay solutions, such as Apple Pay, Google Pay and Samsung Pay being a key enabler for mobile NFC ticketing across many markets.

Overall growth in contactless transaction values will be catalysed by growing mobile payments adoption, with 99% of all smartphones capable of making contactless payments by 2027, up from 94% today, and average transaction values for Apple Pay reaching $28.20 and $33.40 for Google Pay.

Apple Pay has become one of the world’s most used digital payment methods. Its user base increased from 521.4 million to 535.8 million in 2022. By 2024, the total number of Apple Pay users was estimated at 640 million and is projected to exceed 700 million by 2027, 

According to Apple’s Q2 last 2022, they saw a record of transactions with more than 1.8 billion processed during the quarter, up 40% year-over-year. This payment method is also available in over 90% of the US and 60% of stores globally. 

Apple Pay is the #1 most popular digital wallet with a 92% market share, processing a global total of $6 trillion in payments in 2022 and produced a revenue of $1.9 billion. 

As of 2023, Apple Pay processed 14.2% of all online consumer payments and 3.5% of all in-store purchases.

Around 51% of global iPhone users have enabled Apple Pay in 2022. There are 10 million Apple Pay-friendly contactless payment terminals worldwide.

The transactions made using Apple Pay are mostly in-store purchases, online transactions, and peer-to-peer payments. It is trendy for contactless payments, especially during the COVID-19 pandemic.

In 2024, an estimated 60.2 million Apple Pay users in the United States; projections indicate that over 75 million consumers will use Apple Pay by 2030. Putting it all together, Apple Pay is increasingly becoming an effective customer acquisition and retention feature for Apple. In June 2022, Apple Pay added Apple Pay Later, its buy-now-pay-later service, allowing users to split purchases into four equal instalments with no interest or fees. Initially launched in the US, the service is expected to roll out to other countries during 2023. In 2023, Apple launched its Card savings account from Goldman Sachs with a 4.15% annual percentage yield. Apple Wallet users can set up and manage a savings account directly from Apple Card in Wallet, with no fees, no minimum deposits, and no minimum balance requirements.

Apple Pay is available in Lithuania from 44 banks and digital payment providers as of November 2024. 

Google Pay has 150 million users across 42 global markets. 

In January 2022, it was reported that the company was planning to transform Google Pay into a “comprehensive digital wallet”, following the app’s reported slow growth and the shutdown of Plex. In April, it was reported that Google was planning to revive the “Google Wallet” branding in a new app or interface and integrated it with Google Pay. Google officially announced Google Wallet on May 11, 2022, at the 2022 Google I/O keynote. The app began rolling out on Android smartphones on July 18, replacing the 2018 app and co-existing with the 2020 Google Pay app in the US. While the app name itself was changed from Google Pay to Google Wallet, the service name of actually paying for things online or in-store remains as “Google Pay.” 

In the US, Google Pay has over 25.2 million users.  Also, Google Pay is used on nearly 800,000 websites as a secure payment gateway. Roughly 20% of all mobile purchases are made using this digital payment processor. 

Google Pay is available in Lithuania from 45 providers as of November 2024.

Samsung Pay is available in 29 countries worldwide and has an estimated 140 million users. Samsung Pay works with Galaxy phones, including the latest Galaxy S22. Samsung claims that its system will work with almost all point-of-sale systems: NFC, magnetic stripe and EMV (Europay, Mastercard and Visa) terminals for chip-based cards. 

In May 2020, Samsung Pay unveiled Samsung Money by SoFi, a mobile-first money management experience that makes available a cash management account and accompanying Mastercard debit card via the Samsung Pay app, in partnership with fintech company SoFi. 

In June 2022 (till this moment) Samsung Pay was renamed to Samsung Wallet in the US, UK, France, Germany, Italy, and Spain. Along with the renaming came new features such as the ability to store digital assets, and digital keys within the Wallet app. 

Samsung Pay is not yet available in Lithuania.

Overview of Cashless Payments

Card payments continued to grow significantly in Lithuania and amounted to 75.80% of total cashless payments compared to 62.34% in the EU. 

Credit transfers (15.51%) represent the dominant cashless payment instrument in Lithuania for both small and large-value transactions. SEPA direct debits accounted for 0.12%. 

Cheques (0.00%) are now almost completely unused. They are still exchanged and cleared bilaterally between banks. 

In 2023, there were 1,064.5 cash-less payments per capita composed of 882.6 card payments and 180.5 credit transfers. 

4 – Cashless Payment Transactions in Lithuania

Note: totals include ‘other payment service transactions’ (2020: 57.3 milllion). These include remittances, payments via telecommunication, digital or IT device, OTC cash deposits and OTC cash withdrawals.
Source: ECB.

During 2020, the COVID-19 pandemic and the ensuing restrictions on activities brought financial challenges, but also sped up progress in the field of payments. A representative survey commissioned by the Bank of Lithuania revealed that one in four Lithuanian residents made non-cash payments more often during the 2020 lockdowns, which led to a significant increase in the use of payment cards as well as mobile phones and other devices for payments.

As of 2021, the BoL reported that the digitalisation of services continued to promote non-cash payments, and a third of the population opted for this method of payment. 

The BoL stated it was examining how to increase the number of points of sale where non-cash payments are accepted. Some areas of business provide ample opportunities for non-cash payments, but there are also areas where such opportunities are often limited. Data collected by the Bank of Lithuania show that more than 80% of SMEs engaged in retail trade, and food and beverage supply enable their customers to pay using payment cards. In other sectors where services and goods are sold in physical locations, fewer entities accept cards. For example, 40-50% of the companies providing various types of customer services or rental and medical services accept card payments. 

A number of possible ways are being explored to increase the number of points of sale accepting non-cash payments, such as the introduction of an obligation to enable non-cash payments, temporary compensation of the costs of accepting electronic payments for small companies, envisaging other incentives for businesses (e.g. facilitation of accounting processes in case of non-cash payments), and improving the transparency of conditions and fees for services of receiving electronic payments.

In 2022, BoL reported that the payment patterns of the population are also changing, with increasing numbers of people paying by electronic means. There has been a significant increase in the share of the population prioritising payments by card, mobile phone, or smart device, making contactless payments, and using mobile apps developed by payment service providers. Three quarters of Lithuanian residents would prefer non-cash payments, up from 50% in 2021.

The non-cash payment habits of Lithuanian residents and businesses and the use of payment services are most accurately reflected by domestic noncash payment transactions, i.e. payment transactions executed between the customers of Lithuanian payment service providers (PSPs). In 2023, compared to 2022, the number of all domestic non-cash payments increased by 12% in 2023 (2022: 22%), with slightly over 1 billion transactions performed. Their total value amounted to €406.7 billion. Card payments accounted for 56%, credit transfers for 40%, and other payment services for 4% of all domestic payment transactions carried out in Lithuania in 2023. According to a representative survey of Lithuanian residents commissioned by the Bank of Lithuania and conducted in 2023, card payments and electronic payments continue to be the preferred methods of payment for 63% of respondents, although 95% of those surveyed use cash in their daily activities.

Exchange Rates

Lithuania replaced its local currency, the litas (LTL), with the euro on 1 January 2015. Joining the EU on 1 May 2004 brought it into the EU’s Economic and Monetary Union, effectively the pathway to euro adoption. 

The litas was previously pegged to the euro on a fixed exchange rate of 1 EUR = 3.4528 LTL. 

Market Infrastructure

The popularity of instant payments in the CENTROlink system continued to grow in 2023 – one third more instant payments were executed than regular payment orders. The number and value of payments declined in 2023 due to a reduced number of participants. Instant payments accounted 55% of the total amount of payments made through CENTROlink in 2023 (2022: 46%), while credit transfers constituted 42% of all transfers (2022: 48%). 

In 2023, there were 228.3 million (2022: 276.3 million) executed SEPA payments (credit transfers, instant credit transfers and direct debits), the value of which increased to €456.2 billion (€476.7 billion). At the end of 2023, 143 PSPs (2022: 148, 2021: 149, 2020: 136) from 19 EEA countries were using CENTROlink services. 

During the period under review, the number of instant payments rose from 128.1 million to 125.4 million and its value decreased from €137.6 billion to €133.5 billion. Instant payments rapidly replaced credit transfers, accounting for 55% of total CENTROlink payments (46% in 2022), while credit transfers accounted for 48% (48% in 2022). The CENTROlink payment system continued to develop instant payment options. In 2023, the consolidation of TARGET services was completed. The Eurosystem implemented a new real-time T2 wholesale payment system, replacing the previously existing TARGET2 system. 

This connection has significantly expanded the availability of the instant payment service throughout the EEA. At the end of 2023, 65 Lithuanian and EEA credit institutions, PIs and EMIs (64 at the end of 2022) were able to provide instant payment services to their customers via CENTROlink payment system. The CENTROlink payment system has direct links with Europe’s main SEPA instant payment systems – RT1 and TARGET (Instant Payment Service, TIPS). Therefore, financial institutions operating in the system are provided with the possibility of offering SEPA credit transfer and direct debit services, as well as SEPA instant payment services as one-stop shops. 

In 2021, the BoL was preparing for the TARGET consolidation project. This project will replace the existing real-time gross settlement system (TARGET2) with a new system (T2-T2S) seeking to optimise the liquidity management of all TARGET services. 

Card Issuers – Overview

Lithuanian banks issue credit cards, charge cards, debit cards and prepaid cards in combination with bank accounts. Addressing the specific needs of personal banking and business banking, the card portfolio is composed of consumer cards, business cards and corporate cards. 

Dedicated card products are offered for the individual client segments: families, millennials, students, affluent clients, small business clients, corporate clients and even basic account clients. The credit cards offered range from classic cards to gold cards and platinum cards. 

Most Lithuanian retail banks issue cards. The leading issuers are Bankas Swedbank, SEB Bankas, Citadele Bank and Luminor Bank. Many issuer banks are dual brand issuers. Effective 2018, Citadele no longer issues American Express cards. American Express Payments Europe now issues American Express cards on its own. 

Following the suspension of Snoras Bankas by end-2011, a major part of the card portfolio of Snoras was transferred to DNB Bankas (now Luminor Bank). Following the suspension of Ukio Bankas in May-2013, a major part of the card portfolio of Ukio was transferred to Šiaulių Bankas. 

Table 5 illustrates the card brands accepted by the leading issuers in Lithuania as of mid-2024. 

5 – Leading Card Issuers in Lithuania

Note: In 2015, Danske Bankas sold its consumer card portfolio to Bankas Swedbank. Effective 2018, Citadele no longer issues American Express.
Source: PCM research

Outlook – By mid-2024, Lithuanian card issuers face the following notable challenges: 

• Launch of Debit Mastercard cards and VISA Debit cards replacing Maestro cards and V PAY cards 
• New card features such as variable recuring payments (VRP) and buy-now pay-later (BNPL) 
• Rollout of online/mobile bank payment services combined with mobile apps and FinTech partners 
• Continued consolidation of card portfolios and card products following the IFR regulation 
• Implementation of 3D-Secure 2.3, launch of digital wallets, in-app payments, in-store payments 
• Strong Customer Authentication (RTS SCA), risk-based authentication (RBA), biometric authentication 
• Competition from card-less payment service providers: PISPs, AISPs, FinTechs 
• Tokenisation security combined with HCE NFC and card credentials stored-on-file 
• Impact of PSD2 and its Open Banking mandate on secure access to card accounts 
• Compliance with the General Data Protection Regulation, GDPR and the PSD2, including RTS SCA 

 

Card Processors and PSPs

In Europe, the payment processing industry is composed of card processors, ATM/POS network hub processors, e-/m-payment service processors (PSPs), and specialised processors (e.g. CSM processors, TSM services). 

In Lithuania, card issuer processing services range from technical issuer processing, including card printing, to full cardholder processing services. They include all types of cards and card technologies allowing for card use in multi-channels (i.e. at ATMs, POS terminals, on the internet and in-store mobile payments in the future). 

Acquirer processing services in the country range from technical acquirer processing, including POS terminal services, to full merchant processing services. Usually, ATM/POS network processing is part of acquirer processing while payments on the internet are routed by specialised e-/m-payment service processors (PSPs) to the card acquirers and independent payment service providers (e.g. FinTechs like PayPal), respectively. 

The leading card processor in Lithuania is Worldline, which bought First Data Baltics in 2017. Also, NETS Estonia is active in Lithuania. Few Lithuanian issuer banks operate own in-house issuer processing systems. 

Worldline Lithuania – In 2016, First Data Baltics reported revenue of €23 million. In July 2017, Worldline (B) acquired 100% of the share capital of First Data Baltics (FDB) for €73 million. With the acquisition of FDB, Worldline enters the Lithuanian, Latvian and Estonian markets. The transaction was closed end of September 2017. 

In June 2017, Worldline acquired online payments outfit Digital River (S), providing Worldline with its first operational positions in Sweden, the US and Brazil. 

First Data Baltics claimed to be the leading card processing centre in Lithuania. The main operations of the company are issuing processing, acquiring processing, clearing and settlement with domestic and international banks and payment schemes. Additional operations include the maintenance of POS terminals, transaction monitoring and personalisation services. It operates a domestic gateway to VISA International and Mastercard International payment cards networks. 

First Data International had a presence in card processing in Lithuania through MKS (Mokejimo Korteliu Sistemos), the card payments processing centre in Lithuania. Like its counterpart BankServiss in Latvia, MKS was owned by Oslo-based EuroProcessing International (EPI), acquired in June 2005 by First Data. Also, in 2004, MKS took over management of the POS network previously owned by Vilniaus Bankas (SEB), one of the leading acquirers in the country. 

In November 2020, Italian processor Nexi confirmed its intention deal to buy NETS for €7.8 billion, with the signing of a merger deal taking place in June 2021. The completion of the transaction was subject to approval from Finnish regulator FIN-FSA and closed in June 2021. The merger of Nexi and NETS creates Europe’s largest payments firm by volume and number of customers.

As of 2020, NETS processed over 2.87 billion transactions worth $142.24 billion in Europe and counted 402,050 merchant outlets and 910,354 POS terminals in its acquiring network.

Online Payment Service Processors (PSPs) 

Online payment service processors (PSPs) are specialised technical processors for all kind of secure online payments and mobile payments. Some of them also offer virtual PSP platform services (VPSP) for bank acquirers who want to take advantage of a kind of ‘internet network processor’. 

Online shops of merchants are directly connected by an API interface or a hosted payment page either to the internet payment gateway of a bank acquirer, or they are connected to multi-acquirers through a PSP. 

PSPs usually partner with more than one card acquirer and payment initiation service providers. Core services offered by PSPs may include payment gateways to card acquirers and other online payment service providers, online payment processing, risk management services, and collection services for merchants. 

Security technologies applied to ensure secure online card payments include EMV tokenisation and strong 3D-Secure (MCSC, VbV, SafeKey) combined with one-time tokens. For card-less payment services, the security technologies applied include userID/password combined with one-time tokens and online banking access with one-time TAN. 

The PSPs resident in the country include Worldline Lithuania (previously First Data Baltics), NETS Estonia, paySera, WoraPay, and a few other PSPs. Like in other European countries Lithuanian bank acquirers, cross-border acquirers and foreign PSPs provide their services on the internet in Lithuania. Among others, online merchants may be serviced by: 

• Baltic PSPs like DixiPay (LV), eComCharge (LV), Payzoff (EST)
• Adyen (NL), Worldline (Ogone, GlobalCollect), PayU (PL)
• DataCash (UK), WorldPay (UK), PaymentWall (US), PaySafe (Skrill (UK), Paysafecard (A)) 

 

Acquiring and Acceptance

In Europe, most acquirers offer multi-channel card acceptance and value-added merchant services at POS terminals, mobile MPOS terminals and online shops. The leading acquirers usually act on a European level and offer their services cross-border. 

Additionally, innovative acquirers also offer the acceptance of card-less payment services based on partner agreements with the issuer of those payment services (e.g. account-based payments, wallets, prepaid products). 

Most acquirers either operate their own acquirer systems and ATM/POS/MPOS network service hubs, or they use the processing services of external processors. In order to service online merchants in Europe, they may operate their own PSP processing platforms or they co-operate with one or more specialised online payment service processors (PSPs).

From 2009, European acquirers compete in their home markets, cross-border on a European level, and cross-channel at POS terminals and servicing online merchants. From 2016, innovative acquirers started to offer omni-channel and multi-payment acceptance. 

By mid-2024, omni-channel acceptance includes the ability to service all channels (i.e. POS/MPOS terminals, mobile in-store, online shops, in-app), and to accept multiple payment means in all of these channels. Multi-payment services demanded by merchants include cards, IBAN-based payments (SCT, SDD), online wallets, digital wallets, prepaid products, and immediate payments. 

Outlook – By mid-2024, Lithuanian acquirers face the following notable challenges: 

• Rollout of contactless POS/MPOS terminals and innovative SmartPOS devices, Interchange++ 
• Complete acquirer service portfolio beyond cards i.e. acceptance of card-less A2A payment services 
• New payment services such as variable recuring payments (VRP) and buy-now pay-later (BNPL) 
• Omnichannel payment acceptance: POS/MPOS, online, mobile in-app, mobile in-store 
• Cross-border competition, omnichannel competition, finding PSP partners and PISP partners 
• New security standards e.g. 3D-Secure 2.3, tokenisation security, biometric authentication 
• Implementing Strong Customer Authentication (SCA) and risk-based authentication (RBA) 
• Compliance with the General Data Protection Regulation, GDPR and the PSD2, including RTS SCA 

 

The leading acquirer banks are SEB Bankas, Bankas Swedbank, and Luminor Bank, followed by Citadele Bankas and Šiaulių Bankas. The leading acquirers accept the Mastercard and VISA brands. It is noted that Ūkio went bankrupt in May 2013 and Šiaulių Bankas took over the Ukio acquirer business. 

Citadele Bankas was the exclusive American Express acquirer in the country while SEB Bankas through SEB Kort was the Diners acquirer until the issuance of Diners Club ceased in 2019. So far, there are no domestic V PAY acquirers. It is noted that large merchants have more than one acquirer. Table 6 illustrates the card brands accepted by the leading domestic acquirers as of mid-2024. 

6 – Leading Acquirers in Lithuania

Note: NETS (DK) now acquires JCB card transactions in Lithuania. Citadele has ceased acquiring AmEx and acceptance is now very limited.
Source: PCM research

Payment Institutions

In 2023, there were 43 payment institutions resident in Lithuania (2021: 47, 2021: 54, 2019: 48, 2018: 49, 2017: 41, 2016: 41, 2015: 40, 2014: 37, 2013: 32, 2012: 28, 2011: 21). 

Authorised in another EEA member state, additionally, a total of 227 cross-border payment institutions provided notification of operating in Lithuania under the EU passport system (2020: 425, 2019: 444, 2018: 351, 2017: 333, 2016: 307, 2015: 299, 2014: 246, 2013: 189, 2012: 136). Most of the institutions report payment services taking the form of remittance business. 

In 2021, the amount of payment transactions executed by EMIs and PIs exceeded €190 billion. The total amount of payment transactions executed by the sector amounted to €75.75 billion at the end of 2023, 1.6 times more, compared to 2022. Companies generated revenues from licensing activities of €503.97 million, i.e. €361.60 million (3.5 times) more than in 2020: EMIs accounted for 92% and PIs earned 8% of these revenues. 

Finolita Unio – In May 2017, Singapore’s Senjo Group acquired the Lithuanian start-up to gain access to EU markets, JSC “Finolita Unio”, which has a payment institution license granted by Bank of Lithuania. Finolita Unio can carry out all payment and payment account related transactions, direct debits, payment cards operations and provides other payment services. 

In June 2021, the Bank of Lithuania revoked the licence of Finolita Unio for severe infringements of anti-money laundering and counter-terrorist financing requirements, in relation to collapsed German payment provider Wirecard.

Establishing a Payment Institution in Lithuania – Given the UK’s withdrawal from the EU (Brexit), Lithuania is said to offer an interesting proposal for licensing of payment institution. 

The Lithuanian regulator proposes to issue payment licenses under an accelerated program to all companies already holding similar licences in the UK. With such kind of insurance in case of Brexit, payment systems will be able to further run their business safely even in case of unfavourable events relating to Great Britain’s withdrawal from the EU. 

Also, Lithuania now may be of interest to companies that are only going to receive a payment licence. The fact is that one of the advantages of this jurisdiction is the possibility of remote identification of customers, which until now existed in full only in the UK. Lithuania adopted a law on remote identification at end-2016. 

Remote identification allows payment institutions to open accounts for their customers without their personal visit to the company’s office and conduct AML procedures remotely using the electronic means and in digital format – it is enough to get the client’s basic ID scans and have a short interview, for example, via Skype. Certification of papers and their sending by mail is not required. This, of course, greatly facilitates and accelerates the process of the appearance of new customers in the payment institution and is in fact a competitive advantage for the company – new client accounts can be opened in this way literally in 1 hour. 

The Lithuanian regulator is said to be ready to issue full API (Authorised Payment Institution) licences within a period of three to six months, which distinguishes Lithuania from other jurisdictions where a waiting period for such a licence can last for up to a year. 

In 2021, BoL announced that 28 FinTech companies had been licensed or included in public lists. FinTech companies included two specialised banks, e-money institutions and payment institutions, crowdfunding platform operators and P2P lending platform operators. As of early 2022, more than 40 applications for licences to potential fintech sector participants were being assessed. 

ATM Terminal Infrastructure

According to Bank of Lithuania, the central bank, there are four ATM networks. Worldline Lithuania (previously First Data Baltics) operates an ATM network for Lithuanian banks, Medus. Bankas Swedbank and SEB Bankas operate their ATM network on Nordic group level. Nordea, Danske, and Citadele previously used their Pan-Baltic ATM network (see below) until Nordea ATMs were absorbed into the newly-created Luminor Bank network. Citadele Bankas and Šiaulių Bankas are using a common ATM network, while Bankas Swedbank uses the ATM network of Swedbank Group and SEB Bankas used the SEB ATM network. 

Lithuanian ATMs are open to debit cards (Maestro, Cirrus, Electron, Plus, and Debit Mastercard) and credit cards (Mastercard, VISA, American Express, Discover, UnionPay and JCB) with most cash withdrawals on debit cards. The EMV migration of ATMs is complete. 

In September 2019, Siauliu Bankas and Citadele Bankas announced they would be pooling their ATMs in the Medus network, managed by Worldline Lithuania. 

In May 2021, Luminor Bank and Worldline signed a five-year agreement under which Worldline unified and upgraded Luminor’s current ATM network. Previously, Luminor’s ATM network was operated on different models across Estonia, Latvia, and Lithuania, with some fully owned ATMs and some being outsourced to different service providers. Unifying the network made it more efficient and also provided the bank’s customers with consistent functionality and service across the Baltics. 

According to the ECB, in 2023, the country had 707 ATMs (-0.28%% from 2022). Luminor Bank clients could withdraw cash from their payment card accounts in the 2,100 terminals of Perlo paslaugos UAB all over the country. These terminals also allow for cash pay-ins and basic utility payments. Luminor owns 185 ATMs throughout the Baltic states, and additionally provides services through 100 ATMs in partnership with other financial services providers. 

The impact of the COVID-19 pandemic can be seen in cash withdrawals figures. In 2023, there were 40.57 million cash withdrawals (-3.29%) with a total value of €8.36 billion (-3.49% vs 2022). There were 4,782.1’ withdrawals per ATM per month, and the ATV per domestic cash withdrawal amounted to €206.05. 

In 2022, the Bank of Lithuania initiated the installation of 100 additional ATMs across the country. This project was successfully implemented, improving access to cash for 250,000 regional residents in 40 municipalities. The expansion of the ATM network was focused specifically on the regions, with 100 new ATMs installed in small residential areas where there had never been an ATM previously. 

7 – ATMs and Cash Withdrawals in Lithuania

Source: ECB, Bank of Lithuania.

Cash-advance Services in Lithuania – Competition for ATMs 

In an Open Banking ecosystem, the dominant role of ATMs for cash withdrawal services may decline as more cash-advance and cash handling services are offered at retail outlets in Europe. 

Cash in-Store – In parallel to ATM cash withdrawals on cards, the Lithuanian banks support cash-advance services on cards at POS terminals in retail outlets (see below). 

Pan-Baltic ATM Network – Nordea and Sampo (subsequently Danske) announced plans in August 2006 to develop a network of 400 ATMs in the Baltic States – 200 in Lithuania, 100 in Estonia and 100 in Latvia, with operation of the network to be outsourced to First Data. 

In May 2010, the Baltic units of Swedbank, SEB, Nordea Bank and Danske Bank launched a project analysing the feasibility of a common ATM network covering the entire Baltic region. The four banks had a total of 936 ATMs in Estonia, 604 in Latvia, and 868 in Lithuania, amounting to 2,408 ATMs across the region. The study pointed out that merging ATM networks is beneficial to customers and banks, but Swedbank and SEB subsequently suspended their participation. Both are involved in the Swedish ATM network project, Bancomat (see Sweden profile). 

In May 2012, Nordea and Danske agreed to continue operating their joint Pan-Baltic ATM-network and remain open to any Baltic operator wishing to join it. In Estonia and Latvia, the joint network was operated by Nordea and Danske, and in Lithuania also the banks Sialiu Bankas and Citadele Bank participated. In the three countries, a total of 519 ATMs belonged to the joint network in 2017 (Luminor Bank: 179, SEB: 342). 

Bankas Swedbank is a user of the ATM network hub at Swedbank group level. In 2023, Bankas Swedbank reported 406 ATMs in Lithuania while Swedbank Group operated a total of 1,141 ATMs in the Baltic countries. Under Swedbank’s common payment gateway project, card transactions in all its Baltic banks are authorised, cleared, and settled under the terms of its agreement to use the VISA Europe platform, initially for processing transactions in Sweden and eventually across the whole of Swedbank. This has extended VISA’s volume-based pricing to the Baltics (see also Sweden profile). 

In 2021, the BoL’s Payments Council examined the issue of access to cash in Lithuania to support the Memorandum of Understanding for Ensuring Access to Cash in Lithuania. The Payments Council, which brings together PSPs, payment service users, regulators, and academia, examined the possibilities of ensuring access to cash in Lithuania, focusing on sustainable access to cash in the regions and the improvement and development of alternative methods of cash accessibility. 

In June 2021, the BoL, the Association of Lithuanian Banks and financial and credit institutions signed a Memorandum which agreed on minimum accessibility criteria for cash withdrawal services from payment accounts. Financial and credit institutions undertook to double the number of localities where cash withdrawals are possible and to provide at least 100 additional cash access points. Prior to the signing of the Memorandum, ATMs were operating in 91 localities, and the implementation of the Memorandum should ensure the possibility of cash withdrawals in at least 191 localities. Upon the implementation of the Memorandum, at least 90% of the Lithuanian population will be able to reach a cash access point at the distance of up to 10 kilometres, or 99% of the population at the distance of 20 kilometres. 

Financial and credit institutions decided to set up joint ATMs administered by an independent supplier, which will be available to residents under the same conditions as their own credit institution’s ATMs. The list of ATMs will be published on the website administered by the independent supplier and on the website of the Bank of Lithuania.

In 2021, when the ATM network of Lithuanian Branch of Luminor Bank joined the Medus network and optimised the infrastructure, as provided for in the Memorandum, access to cash was improved for customers of the Lithuanian Branch of Luminor Bank, the Lithuanian Branch of Citadele banka, Šiaulių bankas, and the Lithuanian Central Credit Union (LCCU) group, as it ensured the possibility to use the ATMs of the connected networks under the same conditions as their own credit institution’s ATMs. After joining, customers of Lithuanian Branch of Luminor Bank AS can use ATMs in 1.1 times more residential areas than before, customers of Šiauliai bankas and AS Citadele banka Lithuanian Branch and the LLCU, in 1.5 times more residential areas than before. In addition, Swedbank, AB installed six new ATMs from the signing of the Memorandum until 31 December 2021.

Prior to the Memorandum, ATMs were available in 91 locations (mostly in large towns); after the implementation of the Memorandum, ATMs are now available to residents in as many as 191 localities. The ATM expansion was focused on regions, with 100 new ATMs installed in localities with fewer than 4,000 inhabitants (fewer than 2,000 in most of them) that have never previously had an ATM. In 2023, sufficient access to cash was ensured, and the ATM network expanded in 2022 was maintained.

POS Terminal Infrastructure

According to the Bank of Lithuania, the central bank, there are six POS networks. Worldline Lithuania (previously First Data Baltics) operates a POS network for the Lithuanian banks while Bankas Swedbank and SEB Bankas operate their own POS network concentrator hub on group level. The EMV migration of POS terminals is complete, since end-2012. 

Accepted brands at Lithuanian POS terminals include debit cards (Maestro, Electron, and Debit Mastercard) and credit cards (Mastercard, Mastercard Electronic, VISA, American Express, and JCB). 

Large merchants may have contracts with more than one acquirer for card processing through the same POS terminal. As each bank reports the number of POS terminals separately, double counting is possible. 

According to ECB, in 2023, the country had 335,029 POS terminals (+11.57% vs 2022) with 559.67 million POS payments (+15.98) and a total value of €11.30 billion (+13.31% from 2022). The major increase in the number of POS terminals came from terminals located in the ‘Rest of the World’ from 2,740 in 2021 to 227,011 in 2022. There were 139.2 payments per POS terminal per month. The ATV per POS payment amounted to €20.19 showing that more low-value payments were made using cards. 

8 – POS Terminals in Lithuania

Source: ECB, Bank of Lithuania.

Cash Advances – Up to end-2014, cash advances (‘cashback’) up to LTL 50 (€14.48) per purchase were offered at POS terminals, e.g. in rural regions where ATMs are not deployed. The service was available at more than 600 retail locations in Lithuania. In 2014, Bank of Lithuania reported 2.38 million transactions with the value LTL 426.3 million. The ATV per cash advance amounted to LTL 179.11. 

As of 2023, the BoL reported 1.06 million cash advance transactions with a value of €96.5 million at the POS terminals.

MPOS Terminals – Mobile merchants (i.e. no fixed outlet) have started to use their smartphone and tablet PCs as a kind of mini-POS+ECR device with added chip reader dongle. In late 2012, Square clones like Zettle, SumUp, Miura, and others launched their MPOS services in Europe. Zettle is expected to support the Nordic banks in the Baltic region. Also, merchants can initiate MOTO-like card payments on their smartphones and tablets by downloading a payment app. 

In October 2017, SumUp launched its MPOS terminal service in Lithuania. Small business owners can take card payments with their smartphone and the SumUp Air card reader without any monthly fees or contractual obligations. 

SmartPOS Terminals – In 2018, POS terminal vendors launched innovative new types of POS terminals. Named SmartPOS terminals, they combine the electronic cash register functionality (ECR) used by merchants in outlets with a contactless POS payment terminal and merchant services in the cloud. For the very first time, the so far separated ECR devices and POS terminals are integrated in just one checkout solution device. From late 2018, SmartPOS terminal vendors like Castles, Clover, Ingenico, Jusp, Handpoint, PAX, Poynt, Spire Payments, Verifone, Worldline, and others have launched their SmartPOS devices and services in Europe. It is believed that Lithuanian SME merchants will embrace SmartPOS terminals. 

Shift4Payments (formerly Harbortouch) – In March 2017, Harbortouch (US), a POS payment solutions provider, established a product development division in Lithuania. The division is the company’s first outside the US. Established in 1999, Harbortouch services around 300,000 businesses in the US and processes around €10.5 billion of payments value through the Harbortouch system. In addition to touch-screen POS solutions, Harbortouch processes payments on credit, debit, gift and loyalty cards through electronic cash registers and credit card terminals. In early 2019, the company rebranded to Shift4 Payments and now has more than 100 employees in the country, having experienced growth of 50% in its Lithuanian operations between 2018 and 2019. 

Remote Payments on the Internet – Cards & More

Lithuania is a small e-commerce market in Europe, but with a growing online shopping population. From 2015, due to EU VAT regulation, Lithuanian merchants will have to collect the applicable VAT rate for cross-border sales based on the consumers’ residence.

Internet Use – In 2023, 89% of Lithuanians used the internet and more than 61% of all internet users have purchased in online shops in the last 12 months. 

Lithuanians are very active online in using new services over mobile, e.g. payment instruments, mobile e-signature, car parking, banking services, etc. Lithuania also performs exceptionally well in SMEs selling online and selling online across border to other EU countries.

According to Statistics Lithuania, in 2023, 60.9% of Lithuanians used e-commerce for personal purchases in the previous 12 months. E-commerce was mostly used to buy clothing, footwear, accessories (31% of e-commerce users), transport services from enterprises (24%), tickets to cultural or other events (20%), cosmetics, beauty, or wellness products (16%), medicines, food supplements, vitamins (15%), prepared foodstuffs and beverages delivered from catering enterprises (13%), physical goods from private persons (13%).

Domestic retailer associations claim that the Lithuanian online B2C e-commerce value of goods and services amounted to €0.95 billion (-1.04%) at end-2023 showing a CAGR of 11.15% from 2019. The B2C e-commerce amount per capita accounted for an average of €329.2 while it was €480.3 per online buyer. E-commerce (eGDP) had 1.32% market share of Lithuanian GDP in 2023. 

9 – Internet Use in Lithuania

Source: Eurostat, ITU, PCM research.

Cards on the Internet (CNP) – All cards with international brands are accepted in Lithuanian online shops once the merchant has signed an acceptance contract accordingly. Also, domestic banks issue prepaid cards and virtual cards for internet use only. The use of virtual cards for low-value internet transactions has increased. Many online shops connected to the card schemes have enrolled 3D-Secure. Additionally, web-based mail order services for merchant-initiated payments and Dynamic Currency Conversion (DCC) are offered. 

The e-Payment Mix – In 2015, for the first time, debit cards were used more often for online payments than credit cards and virtual credit cards — that prevailed in the past. 

Estimates from the Bank of Lithuania show that the volume of e-commerce payments surged in 2020 compared to 2019. The number of remote card payments increased by 25%, while the number of payments by transfer (using the Banklink service, payment initiation service), rose by 18%. These are the most popular methods of payment for goods and services purchased online. 

In H1 2021, the BoL reported that the average value of e-commerce payments made by e-shops operating in Lithuania increased by 19% compared to H1 2020. Customers have increasingly used payment cards for online payments not only in foreign online shops but also in Lithuanian ones. The number of online card transactions in H1 2021 increased by 4.5 times compared to the same period of the previous year, while the average transaction amount increased by 56%. Compared to 2020, the number of e-commerce transactions initiated by all Lithuanian residents and businesses in 2021 increased by 43.8% (24.5% in 2020), with their value growing by 40.4% (52.5 % in 2020).

Remote Payments on the Mobile Internet – Since 2011, online buyers have started to use of their smartphones for shopping on the mobile internet. Mobile online shops can be accessed by mobile internet, by mobile app or by scanning a 2D QR-code displayed in a newspaper or at a bus station. Thus, remote mobile payments are executed either by using the e-payment page of the mobile online shop or by using the payment apps of a PSP or an acquirer. 

Also, merchants can download a payment app from their acquirer in order to initiate MOTO payments with cards and/or online direct debits. Leading Lithuanian merchants are field testing their own mobile apps including loyalty functions (e.g. e-vouchers, discounts, outlet finder, QR-code scanning) and an IBAN-based direct debit payment function. 

Mobile Payments – Overview

In 2023, 137.0% of Lithuanians have subscribed to a mobile phone. Many Lithuanians own more than one mobile phone and many own a smartphone (92%). Also, tablet penetration jumped significantly from a low level. 

Since 2009, the next generation of mobile services and payments has started, pushed by the online buyers’ high affinity to smartphones and tablets and also by new disruptive technologies (1D-barcodes, QR-code, Bluetooth BLE and Near Field Communication NFC). 

Mobile initiatives in Lithuania are field testing and using new technologies either as initiating form factors to bridge to online shops on the internet (1D-barcodes, QR-code, NFC) or to enable contactless access to the retail POS outlet (1D-barcodes, QR-code, BLE, Bluetooth Low Energy, NFC Stickers, Mobile NFC Phones) e.g.: 

• To enable access to online shops for any type of mobile devices (e.g. tablets, iPhones, Androids)
• To enable mobile services and payments initiated by consumers’ tablets or smartphones at ATMs, at vending machines, at smart posters and at POS terminals in retail outlets
• To enable small merchants’ tablets and smartphones by adding MPOS terminal devices for payment services 

 

The m-Payment Mix in Lithuania – There are no official m-payment statistics, but PSP information indicates that the domestic m-payment mix is similar to the e-payment mix on the internet (see Remote Payments on the Internet section).

According to a BoL survey, in 2022, there was an increase in the proportion of respondents with accounts who used payment service providers’ mobile apps, with slightly more respondents using them to check account information and make payments. 69% of respondents with accounts used mobile apps developed by payment service providers (56% in 2021). 84% of respondents with accounts used mobile apps to receive information on the account and payments (checking account balance, card information, account statement, etc.) (90% in 2021), 66% used mobile apps to make payment transfers (send payments) (53% in 2021), 36% used mobile apps and smartphones to make payments at points of sale (contactless payments via the phone, linking the phone to the payment card, other) (24% in 2021) and 6% – for payments by smartwatch, bracelet or ring at points of sale.

Mobile Payment Initiatives

In 2024, the various European mobile payment initiatives can be grouped into 

• Non-bank players like FinTechs, payment initiation service provider (PISPs), and account information service providers (AISPs) launch digital payment services beyond cards 

• Innovative banks that launch mobile banking apps allowing for card-less in-app payments, in-store payments, and payments on the internet 
• Leading banks that pilot mobile HCE NFC payments with the card credentials stored-on-file in the cloud 
• Banks partnering with mobile network operators in order to offer mobile SIM SE NFC payments on cards with the card credentials stored in a secure element on the SIM card of the respective mobile device 
• Innovative retailers that offer their own apps with loyalty and payment functions to their consumers 

 

Central Bank Digital Currencies, Cryptocurrency Products 

In 2023, the Lithuanian payment ecosystem was composed of traditional cash payments, digital cryptocurrency products of independent payment service providers and research and development of central bank digital currencies, CBDC. The regulation of cryptocurrencies is becoming increasingly relevant as independent cryptocurrency products have grown more prevalent, posing challenges for regulators and national central banks.

In July 2023, the European Union introduced the Markets in Crypto-Assets (MiCA) regulation, which aims to standardize cryptocurrency regulation across member states, including Luxembourg. This regulation addresses various aspects of crypto assets, such as market integrity, consumer protection, and financial stability, while also promoting innovation in the sector. Under MiCA, crypto-asset service providers will have specific obligations to protect users’ wallets and mitigate investment risks.

Central Bank Digital Currencies (CBDC) – The Digital Cash Challenge 

Central bank digital currency (CBDC), also called digital fiat currency or digital base money, is a digital currency issued by a national central bank (NCB), rather than by a commercial bank. It is also a liability of the NCB and denominated in the sovereign currency, as is the case with physical banknotes and coins. 

All CBDCs are under the authority of the respective national central bank, and they are part of the domestic cash payment ecosystem. Rather than a new currency, CBDC is a form of central bank electronic money that could be used by households and businesses to make payments. In addition, most CBDC implementations will likely not use or need any sort of distributed ledger such as a blockchain. 

Unlike “retail CBDC,” which is generally designed as a central bank liability universally accessible to individuals and businesses within a jurisdiction’s financial system, “wholesale CBDC” refers to a digitized central bank liability designed for sizable (generally interbank) transactions, and for which access is limited to certain financial institutions. 

National Central Banks (NCBs) have been providing trusted money to the public for hundreds of years as part of their public policy objectives. Trusted money is a public good. It offers a common unit of account, store of value and medium of exchange for the sale of goods and services and settlement of financial transactions. Providing cash for public use is an important tool for central banks. Yet the world is changing. 

Even before COVID-19, cash use for payments was declining fast and convenient digital payments have grown enormously in volume and diversity. To evolve and pursue their public policy objectives in a digital world, central banks are actively researching the pros and cons of offering a digital currency to the public, a “general purpose” CBDC. 

Central banks’ interest in CBDC has increased as a potential means of delivering their public policy objectives. Profound, ongoing changes across finance, technology and society, as well as the recent COVID-19 crisis, provided additional impetus for the research of, and experimentation related to, CBDCs.

CBDC is a national digital currency issued by the central bank that is expected to replace or coexist with fiat money and hold the same value. Mobile money, on the other hand, utilises existing commercial banking-based accounting to manage customer wallet balances based on an exchange with cash or lines of credit and loans.

CBDC is a direct liability on the central bank as it is the main issuer of the currency, whereas digital money is the liability of commercial banks and other authorised financial institutions using funds on account. Although some implementation approaches propose that CBDC can be implemented in either an indirect or hybrid form, its liability remains on the respective national central bank. 

Background on CBDC Evolution

In October 2020, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, Sveriges Riksbank, the Swiss National Bank and the Bank for International Settlements (BIS) published a report, Central bank digital currencies: foundational principles and core features, identifying the foundational principles necessary for any publicly available CBDC to help central banks meet their public policy objectives.

The report focused on a publicly available “general purpose” CBDC (a digital payment instrument, denominated in the national unit of account, that is a direct liability of the central bank). 

A “wholesale” CBDC, restricted to financial institutions, is also an active area of exploration, notes the report, for central banks but one that carries different opportunities, challenges, and risks. The report explored the use cases for, and challenges and opportunities arising from, the possible issuance of a general purpose CBDC. 

In September 2021, the same seven central banks and the BIS followed up with the publication of a new set of reports exploring the potential of retail CBDCs, including policy options and practical implementation issues. While none of the central banks has yet decided to proceed with a retail CBDC, they recognise such an instrument would have wide-ranging implications. Delivering on the future needs of consumers would require systems that encourage innovation, choice and competition among a diverse mix of intermediaries. 

• The first report explores how private-public collaboration and interoperability can be designed into CBDC systems to achieve this objective. In particular, policies about privacy and access to payment data would be key design elements in order to maintain public trust. 
• The second report focuses on how a CBDC could best serve people and businesses in a fast-changing technological landscape. Lessons from previous payment innovations compiled in the report, show that success often requires harnessing network effects and not requiring users to obtain new devices. Nonetheless, there would not be a “one-size-fits-all” solution and CBDC adoption strategies would need to consider multiple perspectives through public consultations. 
• The third report outlines the possible impact of CBDC issuance on banking systems, in terms of intermediation capacity and overall resilience. Preliminary analysis highlights the importance of allowing the financial system time to adjust and the flexibility to use safeguards to influence CBDC adoption. 

 

BIS reported that a 2021 survey of central banks found that “86% are actively researching the potential for CBDCs, 60% were experimenting with the technology and 14% were deploying pilot projects.

The People’s Bank of China (PBoC) is piloting a ‘digital yuan’, known as e-CNY, in various cities, often in association with major sporting events, such as the Winter Olympics.

The ECB published a paper on the potential of a “digital euro” in October 2020, exploring the “benefits and risks” of such an initiative. It completed a public consultation in January 2021 and a series of focus groups in December 2021. Its investigation stage is expected to continue until October 2023, after which the ECB “will decide whether to start developing a digital euro.”

The US Federal Reserve reported in February 2022 that while it has made no decisions about “whether to pursue or implement” a CBDC, it was “exploring the potential benefits and risks of CBDCs from a variety of angles and was inviting public feedback on discussion papers.

The Bank of Japan said in October 2020 that it had no plans for a CBDC and was committed to maintain the cash system as long as there was public demand for it. It nevertheless intended to explore technical feasibility through a proof of concept, consider institutional arrangements and coordinate approaches with domestic and international stakeholders. In 2023, the Bank of Japan (BOJ) has announced that it will begin a pilot for its digital yen with commercial financial institutions. In February 2023, Bank of Japan has embarked on a CBDC trial. 

In June 2023, the BIS and BoE said they completed a CBDC pilot project involving CBDCs jointly run by the Bank of England (BoE) and the Bank of International Settlements (BIS). Project Rosalind was designed to explore how a “universal and extensible API layer” could connect central bank and private sector infrastructures and enable retail CBDC payments. The project also sought to develop a number of retail-CBDC use cases. 

According to the BIS and BoE, the project has successfully demonstrated that “a well-designed API layer could work with different private sector applications and central bank ledger designs and that a set of simple and standardised API functionalities could support a diverse range of use cases”. 

In all, the project led to the development of 33 API functionalities and examined 30 retail CBDC cases including peer-to-peer transfers, retail payments for goods and services and small-value business transactions. 

While CBDCs are still in experimental phases across major economies, 2024 has seen increased momentum towards real-world implementation, with several countries, notably China and the ECB, moving closer to full-scale rollouts. Public-private collaboration, technological innovation, and privacy concerns remain central to future CBDC development. Central banks worldwide continue to balance innovation with maintaining public trust and financial stability in this rapidly evolving space.

Global Status of CBDCs 

Most National Central Banks (NCBs) are involved in different stages of a CBDC project.  Especially, the NCBs have different views on which kind of CBDC they would intend to launch as a digital currency: 

• A “retail-CBDC” designed as an NCB liability universally accessible to individuals and businesses within a jurisdiction’s financial system. 
• A “wholesale-CBDC” that refers to a digitized central bank liability designed for sizable (generally interbank) transactions, and for which access is limited to participating financial institutions. 
• Both a “retail-CBDC” and a “wholesale-CBDC”.

As of 2023, the global CBDC status reveals that four central banks – Nigeria (e-Naira), Eastern Caribbean (D-Cash), Jamaica (JAM-DEX), and the Bahamas (Sand Dollar) – have introduced a domestic CBDC scheme. 

Six countries have launched a CBDC pilot: France, Canada, China, India, Saudi Arabia, and Ghana. 

The NCBs of most other countries are involved in either a CBDC proof-of-concept phase – including Norway, Hungary, and Sweden – or they are still in a CBDC research stage. 

So far, Ecuador is the only country that has cancelled its CBDC ambitions, Dinero electronico. 

CBDC, the European Union and the Digital Euro

In July 2021, the Estonian Central Bank released a report about its experiment with the ECB and the central banks of Spain, Germany, Italy, Greece, Ireland, Latvia, and the Netherlands to assess the functionality of the digital euro. The project was able to conduct 300,000 transactions per second, with an average rate of less than two seconds per transaction. 

In June 2023, the European Commission (EC) has published its legislative proposal establishing the legal framework for a possible digital euro, stressing that the CBDC would be a compliment to, not replacement for, cash. 

A digital euro would be available alongside existing national and international private means of payment, such as cards or applications. It would work like a digital wallet, with people and businesses able to pay with it anytime and anywhere in the euro area.

The digital euro would be available for payments both online and offline. While online transactions would offer the same level of data privacy as existing digital means of payments, offline payments would essentially be like paying with cash – with nobody able to see what people are paying for. 

The digital euro would be distributed by banks and other payment service providers, with basic services provided to people free of charge. Merchants would be required to accept the digital currency unless they are cash-only firms. 

The EC’s proposal still needs to be adopted by the European Parliament and the European Council before the European Central Bank decides whether to roll out a digital euro. Notably, the European Central Bank (ECB) is involved in the preparation phase, which will run until 2025. During this time, technical experimentation and legal discussions are ongoing before any formal rollout decisions can be made​.

CBDC and Lithuania

In 2019, the BoL developed the world’s first digital collector coin, LBCoin, a blockchain-based digital token. Together with its physical version, the first LBCoin was issued in July 2020. The Bank of Lithuania issued 4,000 LBCoins, totalling 24,000 digital tokens and 4,000 physical collector coins. Each digital token featured one of the 20 signatories of the Act of Independence and belonged to one of six categories based on their professions. The exchange of tokens for commemorative coins was possible until January 2023. On January 23, 2023, LBCoin became no longer available for purchase. After the electronic store became unavailable, all unsold digital tokens stored in it were destroyed.

In 2020, the BoL actively contributed to the ECB’s initiative on the analysis and public consultation on the need to issue a digital euro. The digital euro would be an electronic form of money – like banknotes but digital – issued by the central bank and accessible to all citizens and companies that would be a fast, easy and secure instrument for daily payments. 

Subsequently in July 2021, the Governing Council of the ECB decided to launch the investigation phase of the Digital Euro Project. The BoL contributed to the experiment implemented by a working group coordinated by the Banque de France and joining experts from the Banca d’Italia, Banco de España, Banque Centrale du Luxembourg, Banque Nationale de Belgique, the Österreischische Nationalbank and the ECB. 

The group studied a hybrid digital euro model to assess the interaction between the centralised and the decentralised payment systems. LBCoin, as one of the distributed ledger technology (DLT) systems (created based on the NEM blockchain technology), was integrated into a pilot digital euro payment system. The Bank of Lithuania successfully completed digital euro transactions from the LBCoin system to the digital euro systems of other central banks that joined the pilot project. The payments were executed through TARGET Instant Payment Settlement (TIPS), a centralised platform managed by the Eurosystem. 

The pilot exercise confirmed that third-party service providers could readily join the payment ecosystem via a single access point to both centralised and decentralised systems. That opens the way to providing a range of digital euro-related services (e.g. account and electronic wallet management, or payment automation).  

As of 2021, in addition to the digital euro project, the BoL is actively engaged in discussions on a CBDC at the global level. The Eurosystem’s digital euro project entered its investigation phase on 1 October 2021. Over a two-year period, the Eurosystem will seek to examine the aspects necessary for the implementation of the digital euro, such as the need and functionality of such a CBDC and legal issues, as well as define a possible business model. The Bank of Lithuania participates in the Eurosystem’ High-Level Task Force and the Project Steering Group, which are set up to manage the investigation phase of the Eurosystem’s digital euro project. In 2021, the BoL participated in the digital euro experiments to develop a digital euro component based on new technologies (block chain) and analysed their potential benefits for settlements in digital euro.

During the investigation phase, the BoL will contribute to the shaping of digital euro policy and the analysis of legal, design and technical aspects. The Member of the Board of the BoL leads the BIS Innovation Network working group on CBDC which brings together over 40 central banks from all over the world and analyses the relevant aspects of the CBDC. Five discussions on the CBDC technical topics took place in 2021.

In 2022, the main work on the investigation phase of the Eurosystem’s digital euro project was carried out and the Governing Council of the ECB approved the main technical design features of the digital euro. The ECB’s Governing Council agreed that, once the digital euro has been issued, it should be possible to use it both online and at physical points of sale or offline. Privacy in respect of the Eurosystem would be ensured, but anonymity would not be allowed due to the potential risk of fraud and ML/TF. To manage risks to financial stability, limits on the digital euro balance are being considered.

Pros and Cons of CBDCs

According to research by the Bank of England, BIS, and by several other central banks, the benefits of CBDCs include supporting increased innovation in the payment system with:

• ‘Programmable money’ that enables transactions to occur according to certain conditions, rules or events 
• Automatic payment of taxes at the POS
• Allowing the government to make direct transfers to individuals 
• Automatic payment of dividends directly to shareholders
• Electricity meters paying suppliers directly based on power usage 
• Making ‘micropayments’ at much lower costs
• A more reliable and attractive alternative to stablecoins (see Stablecoins section below)
• A well-designed CBDC could help to retain some of the beneficial characteristics of cash that current electronic bank deposits don’t. A CBDC might focus more on promoting privacy or support financial inclusion 
• CBDCs could facilitate better cross-border payments systems by linking CBDCs to speed up cross-border payments 
• More effective transmission of monetary policy
• Changes in base rates could be passed onto consumers more quickly and efficiently.

 

Possible challenges related to use of CBDCs could include:

• Disintermediation and reducing the banking sector’s balance sheet – When someone converts bank deposits to CBDC, they reduce the size of the commercial bank’s overall holdings. This process of disintermediation is an inevitable consequence of introducing a CBDC. If banks’ balance sheets were to reduce too much and too quickly, they might need to seek funding from elsewhere. This could push up the cost of their lending to businesses and consumers. 
• Risk of bank runs – introducing a CBDC could potentially make it easier for runs on the banking system to occur. At the moment, such factors as the difficulty of storing large amounts of cash limit such risks. A CBDC would remove many of those limits.
• Offline usage – the CBDC payment system would probably require a connection to the central ledger, which may not always be available. While it might still be possible to initiate a payment, the recipient would have to trust the sender to have sufficient funds. There is also a risk of someone attempting to spend the same money twice.
• Cyber-attack – BIS warns that a successful attack on a CBDC system could quickly threaten many users, as well as their faith in the system. This is because there would be so many ‘endpoints’ in a linked, centralised system.  This would make a CBDC system a critical piece of national infrastructure.
• Data privacy – Fully anonymous CBDC are unlikely to be permitted due to the need to comply with know-your-customer and anti-money laundering checks. A CBDC would inevitably allow more tracking and less anonymity than cash does. BIS suggests that “a key national policy question will be deciding who can access which parts of [this data] and under what circumstances”.

 

The ECB commissioned multiple exploratory reports on the feasibility of a digital euro in 2020 and 2021. The ECB’s working paper suggests a two-tier system for a “general purpose” CBDC. In July 2021, the ECB announced that it would launch a 24-month investigation phase for the digital euro project, which aims to address key issues regarding the design and distribution of a digital euro. The investigation phase will include focus groups, prototyping and conceptual work. In February 2022, the European Commission announced that it will propose a bill that would serve as the legal foundation for the issuance of a digital euro by the ECB. In May 2022, Christine Lagarde stated that she would be willing to back the digital Euro. By June 2023, the ECB and European Commission had significantly advanced their legislative and technical work, moving closer to launching a pilot phase for the digital euro in 2024. The pilot phase is expected to assess the practical implementation of the digital euro, following the completion of the current investigation period​.

The working paper states that the use of CBDC for retail payments is the primary use-case for the development of a digital Euro. The paper also rejects the motivation of using CBDC as a store of value, which would involve consumers switching deposits from commercial banks into CBDC. The working paper also recommends that a CBDC should be interest-bearing, with attractive interest rates offered for smaller sums suitable for payments and lower rates available for larger amounts.

Cryptocurrencies EU

The regulation of crypto assets and related services across Europe is not standardised and is highly fragmented. While no nation has outright banned usage of cryptocurrencies like Bitcoin, Ethereum and others, regulators have not formed a consensus over how to legislate such a quickly fluctuating market, where new cryptocurrencies emerge faster than regulators can catch up to.

The current approach across Europe is to adapt existing legislations to encompass cryptocurrencies, however, this is unlikely to be efficient as consumer and business usage changes.

In the European Union, the fifth Anti-Money Laundering Directive (AMLD5) covers certain crypto assets under the term “virtual currencies”, but it does not provide a harmonised approach. As a result, each Member State has created its own regulatory regime for transactions related to “virtual currencies” or crypto assets.

In response, the European Commission proposed the Markets in Crypto-assets (MiCA) regulation in 2020 as part of the Digital Finance Strategy, with MiCA expected to come into force in 2022 and will be directly applicable in all Member States after an 18-month transition period. MiCA will result in a harmonised set of rules for products and services and legal certainty related to crypto assets throughout the European Union in 2024. This would enable a larger number of investors to be active in this area and to use distributed ledger technology (DLT).

MiCA is to apply to all persons who want to issue crypto assets or provide services related to crypto assets in the EU.

The MiCA proposal is intended to lay down uniform rules on transparency and disclosure requirements for the issuance, offer to the public and the admission to trading of crypto assets. In addition, there are rules on the authorisation and supervision of crypto asset service providers and their issuers.

The main focus lies with the issuers of asset-referenced tokens and e-money tokens. The Regulation intends to regulate the operation, organisation and governance of issuers of asset referenced tokens and e-money tokens and crypto asset service providers. There will also be investor protection rules for the issuance, trading, exchange and custody of crypto assets. In addition, measures to prevent market abuse are to be included in the Regulation to ensure the integrity of the crypto assets markets.

In June 2022, the EU Council President and European Parliament reached agreement on MiCA regulation, ruling that crypto asset service providers will require authorisation to operate in the EU, not including NFTs or media-related digital assets.

Under the agreement, the regulatory framework will protect investors and consumers, while ensuring financial stability and enabling innovation and growth. The regulations will help protect consumers from fraud and scams, as crypto asset service providers will be liable if they lose assets and fail to protect investors’ wallets. The European Banking Authority (EBA) will form a public register of non-compliant crypto asset providers.

The regulation will also implement restrictions on stablecoins, with stablecoin issuers to be supervised by the EBA and their “holders will be offered a claim at any time and free of charge.”

Unregulated Cryptocurrency Products – Background 

Regulators and national central banks are challenged by unregulated independent cryptocurrency products. Whereas CBDCs are under the authority of the central bank, almost all cryptocurrencies are decentralised, and not controlled or managed by any central authority. 

Obviously, financial market authorities and the national central banks are not in favour of unregulated cryptocurrency products, and they see them as a systematic risk for the financial system. Their intention to regulate the respective cryptocurrency exchange platforms has gained momentum. 

Cryptocurrencies, originally designed as a store of value, are digital assets, developed and maintained on decentralised blockchains, and they can be used as a medium of exchange or payment method. Bitcoin and Ethereum are the most popular forms of cryptocurrencies worldwide used by consumers and businesses for transactions.

As of 2022, over 400 million people worldwide used cryptocurrencies, with merchants and businesses in more sectors accepting it as a form of payment. The major payment schemes VISA and Mastercard, PayPal and along with a growing number of financial institutions, have launched services allowing consumers to purchase or use cryptocurrencies for a range of applications. 

According to a 2022 Deloitte survey, around two-thirds (64%) of surveyed merchants indicated that their customers have significant interest in using digital currencies for payments, and 83% expect consumer interest in digital currencies for payments to increase or significantly increase over the next 12 months. 

In addition, merchants are motivated by the prospect of enabling immediate access to funds (40% of respondents), taking advantage of blockchain-based innovations in decentralised digital finance (39%), and allowing in-house management of the revenue cycle/treasury/finance department (39%).

Over half (54%) of large retailers (with revenues of $500 million and up) have invested more than $1 million on enabling digital currency payments, while only 6% of small retailers (with revenues of under $10 million) did so.

A 2022 survey from Checkout.com found a sharp rise in people wanting to use cryptocurrencies as a means of payment, with 40% of 18-35-year-old consumers citing their desire to experiment with using crypto as a payment method, up from less than 30% in 2021. Meanwhile, over 80% of businesses say offering crypto has attracted new customers, led to a decrease in chargebacks, while just over 60% have seen higher authorisation rates accepting crypto payments.

A recent report by Triple-A put cryptocurrency ownership in Europe at around 49 million people. 

Stablecoins

Stablecoins are a type of asset-backed cryptocurrency, whose value is typically pegged to the value of an underlying asset such as USD, GBP, or commodities like gold. Stablecoins are partially backed by real assets, and they are designed to have a value pegged to real-world assets, therefore avoiding the extreme volatility that affects cryptocurrencies. 

Stablecoins offer the potential benefits of cryptocurrencies, like transparency, security, immutability, and decentralised control, while maintaining the guarantees and stability that come with using fiat currency. Stablecoins have potential to be used in cross-border payments, providing a secure, online environment for peer-to-peer (P2P) transactions to take place without needing decentralised cryptocurrencies or to pay fees to convert money into local currencies. 

As of 2024, there were more than 200 stablecoins globally, comprising a market that’s worth approximately $174 billion. 

A survey of central banks in January 2021 found that two-thirds of respondents are actively researching the potential impact of stablecoins on financial stability. However, some regulators in the US and China, consider stablecoins as a potential serious risk to financial systems. The risk is especially high with centralised coins, such as those backed by fiat and issued by private organisations, as economic power would be disproportionately concentrated on a single entity.

The widespread use of stablecoins in payment platforms could also pose a systemic risk, in relation to the validation and confirmation of stablecoin transactions which could interfere with payment systems. If stablecoin users couldn’t access money in their e-wallets and businesses couldn’t receive payments, economic activity would be greatly disrupted. However, these risks have not deterred major institutions like JP Morgan and VISA to explore stablecoin use cases via partnerships and internal R&D. 

Tether As of 2024, Tether remains the largest stablecoin globally, holding a market share of over 50%. This dominance is driven by its widespread usage and liquidity in crypto markets. Its nearest competitors include USD Coin (USDC), Binance USD (BUSD), and decentralized stablecoins like DAI, although Tether’s market share far exceeds them. Recent reports have shown Tether’s involvement in major financial markets and even Bitcoin mining, further reinforcing its stronghold on the crypto landscape.

Regarding Facebook’s Diem (formerly Libra) project, it was officially abandoned. Diem’s assets were sold off to Silvergate Capital in early 2022, marking the end of the initiative that once aimed to create a globally accessible digital currency. Regulatory pressures and internal challenges led to the dissolution of the project.

Market Size and Dynamics

Cards in Issue

The fastest growing market segment in Lithuania is virtual cards for internet transactions. There were 53,786 virtual cards in circulation as of the end of December 2014. 

In 2023, there were 32.76 million debit cards and 414,140 credit cards in Lithuania. In total, there were 39.55 million cards amounting to 13.70 cards per capita. Debit cards dominate, accounting for 90.24% of all cards; all debit and credit cards are branded with a brand of the international card schemes. Since 2017, no American Express cards have been issued in Lithuania (see other cards in Table 11). 

The sharp increase in card numbers can be explained by the UK’s withdrawal from the EU. Due to Brexit, some payment and e-money institutions in the UK have transferred payment cards to the Lithuanian payment and e-money institutions. As a result, the number of cards has increased significantly over 2020 – 2023.

10 – Cards Issued in Lithuania

Source: ECB; Bank of Lithuania.

Breakdown by Card Brands – Until 2013, VISA was the larger scheme in Lithuania. However, VISA cards now account for 55.71% of cards issued at end-2023, up from 17.19% in 2019. In addition to the historic dominance of Swedish issuers in Lithuania that have typically used VISA as their debit card brand, the impact of Brexit (see above) has led to an influx of VISA card portfolio migrations from UK issuers during 2020 and 2021.

In 2023, Mastercard cards had a market share of 44.28%, down from 82.58% in 2019. The dominance of the Swedish issuers in Lithuania has waned with the influx of previous UK card portfolios. Additionally, Swedbank now issues Mastercard cards instead of VISA cards. Also, Šiaulių Bankas is now a mono-brand Mastercard card issuer. 

11 – Card Breakdown by Scheme in Lithuania

Note: total payment cards include few domestic cards; “other” were AmExp cards, which discontinued from 2018.
Source: Bank of Lithuania.

Card Fraud

Card fraud is one of the most fascinating aspects of the payments industry, not least because it is relentless and mutating. EMV implementation and 3D-Secure, combined with Strong Customer Authentication (SCA), have done much to reduce domestic losses from lost and stolen cards in Europe. However, the war against fraud losses and the changing face of fraud continues to be a threat for the payments industry, including Lithuania. 

The global card fraud challenges are Card-Not-Present fraud (CNP), cross-border fraud and counterfeiting on non-EMV cards. CNP fraud accounted for 80% of the total value of card fraud losses in 2023. From 2017, a new payment fraud category are fraud losses on contactless card payments. International card fraud continues to be smaller in scale than domestic card abuse but is proportionately far more common. And of course, fraudulent cross-border transactions on cards continue to grow on all purchase channels. 

Losses from card fraud on the internet and cross-border fraud on domestic cards have grown significantly. Following EMV implementation, card fraud has moved increasing to countries where POS terminals or online shops have not yet been migrated to EMV and SCA, respectively, and to cross-border fraud with compromised cards. 

The breakdown of card fraud losses by method of compromise already indicates the importance of distinguishing between domestic and cross-border fraud losses. The method of compromise covers how fraudsters obtain payment cards or card details. Notable methods of compromise in a complex payment world are CNP fraud based on theft of card credentials and card lost and stolen fraud followed by growing ID fraud and by cross-counterfeit fraud. 

The main method of compromise responsible for losses in many European countries is now the theft of card credentials. A high proportion of these card fraud losses are caused by the growth in e-commerce, and still the lack of use of strong customer authentication methods such as 3D-Secure. 

In a post data-breach world, identity information, payment credentials, account credentials and responses to security questions are widely available for purchase in bulk. Complete fraud exploits and zero-day attacks are also easily available on the black market for outright purchase or as a hosted / fully managed service.

In the digital payments world and having the changing face of fraud in mind, there are significant challenges for card issuing banks, payment service providers and their supporting processors. 

According to ECB figures published in August 2020, the share of fraud as a share of transaction value in 2018 in Lithuania was 0.007% by volume and 0.004% by value.

Acquirer card fraud losses by value in Lithuania by channel were composed of ATM fraud: 5%, POS fraud: 29% and CNP fraud: 66%. 

Issuer card fraud losses by value in Lithuania by channel were composed of ATM fraud 5%, POS fraud 1% and CNP fraud 94%. 

As most POS card transactions are authorised online-to-issuer, acquirer fraud rates in Lithuania are under control except for offline vending machines, e-commerce and other hotspots. 

As most POS card transactions are authorised online-to-issuer, acquirer fraud rates in Lithuania are under control except for offline vending machines, e-commerce and a few other hotspots. Obviously, EMV implementation has contributed significantly to declining fraud rates. 

Lithuanian banks are pushing 3D-Secure, offer PIN-change services at ATMs and SMS notification to inform cardholders about the use of their credit card. The increasing numbers of chip technology cards, contactless cards and display cards have led to improved safety of payment transactions. Credit card fraud prevention measures taken have been pushing 3D-Secure, updating banks’ fraud prevention systems and real-time-scoring and implementing more rule-based fraud control mechanisms.

According to the Bank of Lithuania, starting from 2021, when paying for online purchases with a payment card, consumers will often have to authorise the payments with PSD2-aligned authentication methods that are used to access their online banking. 

Bank of Lithuania statistics on fraud in 2020 show that total fraud reached about €8.9 million, with card payment transactions accounting for the largest share, due to fraud on contactless and online payments. Previously, when making contactless payments, a more secure authentication procedure is used for every other transaction or so (the user is asked to enter a PIN code), meanwhile, when executing e-commerce transactions, the user is asked to do that quite seldom. However, this will change in 2021 when stricter security requirements will also be applied with regard to online card payments. 

Credit transfers form the largest percentage in terms of the value of funds affected by fraud. Although stricter authentication is already applied when executing these transactions, customers are often tricked into confirming payment transactions to the wrong payee or freely hand over the temporary control of their payment account to fraudsters. Preventing such cases requires additional measures, such as customer training and the actual and indicated payee verification service.

The rise in the use of Smart-ID has led to the increase in fraudster attacks related to this instrument. One of the widespread types of fraudster attacks involves sending an SMS to the bank customer with a request to update information on their Smart–ID account. A non-suspecting customer is then redirected to the fictitious online banking page where they enter their login data (ID, personal identification number). This is enough to initiate the Smart-ID request to the customer’s phone. If it is confirmed using a PIN code, fraudsters can temporarily take over a one-time control of the payment account and make one or more payments to the account that they control. Funds are immediately cashed out from the account. 

The Bank of Lithuania has been consulting market participants regarding security of Smart-ID. The Estonian company SK ID Solutions that manages this instrument provides a number of additional security measures which PSPs can install in their systems and thus improve security of Smart-ID (e.g. the user is asked to select a control number). 

Card Use

ECB and Bank of Lithuania figures show that POS payments have grown faster than ATM transactions, and from 2006, the number of POS payments exceeded the number of ATM withdrawals. However, the total withdrawals value was 0.23 times that of card payments in 2023, compared to 0.26 in 2022, due to the impact of the COVID-19 pandemic on cash withdrawals. The impact of the pandemic and UK card portfolio migration to Lithuania can also be seen in the sharp rise in card payments.

According to the LBA, in 2023, there were 2,547.11 million card payments (+19.52%) with a total value of €62.36 billion (+16.01 % from 2022). The ATV per card payment accounted for €24.48, indicating that payment cards were used more frequently for low-value purchases, and there were on average 76.8 payments per card per year. 

Total card payments included cross-border payments on Lithuanian cards amounting to 1,985.22 million card payments (+24.89%) with a total value of €49.70 billion (+23.08% vs 2022). In 2023, cross-border card payments on Lithuanian cards accounted for 77.94% by number and 79.70% by value.      

Included in the card payments total in 2023 were 694.34 million remote payments on cards in online shops (+21.97%) with a total value of €27.96 billion (+16.41% from 2022). 

12 – Payments with Lithuanian Cards

Source: ECB, Bank of Lithuania.

Cash withdrawals on Lithuanian cards – According to the LBA and the central bank, the number and value of ATM transactions rose strongly in the period up to 2013. However, from 2014, cash withdrawals by number began to decline. 

In 2023, there were 22.86 million cards with a cash function with 89.41 million cash withdrawals (up 6.18%). The total withdrawals value amounted to €14.48 billion (+3.48% from 2022). The ATV per cash withdrawal on cards was €161.91, and there were 3.9 cash withdrawals per card per year. 

13 – Cash Withdrawals with Lithuanian Cards

Source: ECB, Bank of Lithuania.

Card Use Per Capita

Lithuanian card use per capita showed significant growth with a compound annual growth rate of 55.48% between 2019 and 2023

In 2023, debit card use was 865.6 payments per capita (+18.13%) while credit card use accounted for 16.7 payments per capita (+30.37% vs 2022). In total, there were 882.3 payments per capita and 31.0 cash withdrawals per capita in the country. 

14 – Card Payments Per Capita in Lithuania

Source: calculated using ECB data.

Debit Card Use

Debit card use in Lithuania is high, with debit cards amounting for 82.85% of the total card base. In 2023, there were 2,498.22 million payments on debit cards (+19.32%) with a total value of €60.43 billion (+15.73% vs 2022). The ATV per debit card payment accounted for €24.19, and there were 76.2 payments per debit card per year. 

15 – Payments with Lithuanian Debit Cards

Source: ECB, Bank of Lithuania.

Credit Card Use

In 2014, Bank of Lithuania changed its statistical reporting and added delayed debit card numbers to the total of credit cards. In addition, credit cards in LTL denomination were replaced by credit cards in euro denomination with the effect that the total number of credit cards inflated in 2013 and 2014. In 2015, credit cards in LTL denomination were phased-out, and the credit card total by number declined by 32.4% documenting the one-time effect. In 2023, there were 414,140 credit cards, up by 9.90% from 2022. 

Credit card use continued to grow significantly in Lithuania. In 2023, there were 48.22 million credit card payments (+31.68% vs 2022) with the total value €1.88 billion (+26.09% vs 2022). The ATV per credit payment accounted for €39.04 and there were 116.4 payments per credit cards per year. 

16 – Payments with Lithuanian Credit Cards

Source: ECB, Bank of Lithuania.

Leading Card Issuers

SEB Bankas until recently was a major VISA debit issuer in Lithuania, but subsequently switched its debit portfolio to Mastercard in 2017. It now issues contactless-enabled Debit Mastercard products, including the SEB Mylimiausia loyalty debit card, which offers loyalty points, discounts and special offers available from participating physical and e-store partners. Its credit card range includes the Mastercard Standard and World Elite products, and a VISA Gold card.

In 2021, SEB Bankas reported that payments by bank cards and online shopping comprised 11% growth in net commission income of the bank in 2021 compared to 2020 (€81.3 million in 2021), while net income from payments by card alone increased by 14%.

In 2022, SEB Bank continued to successfully help business customers develop its e-commerce business and monitored growing business volumes in this area: compared to 2021, the number of transactions for payment via payment initiation grew 84%, as well as the turnover of online card payments increased several times. This was also influenced by the well-established habit of residents to pay with payment cards instead of cash – currently, 60% of daily purchases are paid for using a payment card. More than 200,000 payment cards are linked to digital wallets: SEB wallet, Apple Pay, Google Pay, Garmin Pay, Fitbit Pay. Only during December 2022, customers made almost 2 million payments by card via mobile phone or smartwatch. After the end of the pandemic, residents returned to physical stores, so the number of card readers issued to businesses grew 11%, and the number of payments using them also increased – 19% more payments in 2022 were made with POS terminals, in comparison to the same period of 2021. The Bank also offered innovations: a payment card and barcode scanner in one device, the ability to leave a tip when paying by card, as well as a cash pay-out function via POS terminals.

In 2023, SEB Bank continued to enhance its support for business customers in the e-commerce sector. The number of transactions for payment via payment initiation services grew by 4% compared to 2022. Online card payments saw a more substantial increase, growing by 36% over the same period.

Customers of AB SEB bankas might withdraw cash free of charge under the limits of their chosen service plan identical terms (i.e. without any cash withdrawal fee for AB SEB bankas) from any ATM in Lithuania and all over the world. They also have a possibility to withdraw cash free of charge when paying by card at more than 1,250 points of sale.

Bankas Swedbank offers contactless Debit Mastercard cards and Mastercard credit cards. It no longer issues Maestro and Electron debit cards. Its credit card programmes include Mastercard cards in fixed payment, standard, gold and platinum formats. As of July 2020, Swedbank ceased issuance of the VISA Platinum credit card, instead opting to expand its partnership with Mastercard.

In 2023, Swedbank reported that the number of card purchases amounted to 394.3 million, compared to 335.9 million in 2022, while the number of card acquiring transactions was 242.9 million, compared to 208.3 million in 2022. Swedbank reported that the total acquired transaction value was SEK 53,004 million in 2023, compared to SEK 42,381 million in 2022. 

Luminor Bank (previously DNB Bankas) issues VISA Debit cards and VISA Black and Infinite credit cards. The bank ceased the issuance of VISA Classic and Gold cards in favour of more premium products. DNB Bankas replaced its Maestro and Mastercard cards by VISA Debit and VISA credit cards, respectively. Luminor also launched its Black Card in Lithuania in 2020. 

In June 2021, Luminor joined the Medus ATM network, enabling Luminor customers to use 250 ATMs in the Medus network, as well as its own network of 185 ATMs.

Citadele Bankas issues VISA-branded “X” smart debit cards, and VISA credit cards in Hero, Platinum, and Infinite formats. The bank no longer issues American Express, Debit Mastercard, or Visa Electron cards. The bank reported around 40,000 active card customers in 2023 in Lithuania.

Šiaulių Bankas issues contactless Debit Mastercard cards and Mastercard credit cards, including a contactless Gold credit card. It replaced its Maestro cards and VISA credit cards by Debit Mastercard cards and Mastercard credit cards, respectively. 

During 2020, the bank said that the number of customers subscribed for service plans with monthly commissions fees exceeded 164,000 and the number of payment cards increased to 174,000 during 2020. Compared to 2019, the number and turnover of card payments decreased by 6% and 10%, respectively. The demand for cash decreased – the number of cash operations decreased by 14% and the turnover by 15%. No update was given for 2022 and 2023.

Data Tables

1 – Main Lithuanian Commercial Banks in 2023

Note: NCB figures for assets may differ from those published by individual banks.
Note: Revolut Bank UAB gained a banking licence on 13.12.2021
Source: Bank of Lithuania.

2 – SEB in the Baltic States (2023)

Note: asset figures have been converted from SEK at an exchange rate of 1EUR: SEK 11.4788
Source: SEB.

3 – Internet Banking Users in Lithuania

Source: Association of Lithuanian Banks (LBA).

4 – Cashless Payment Transactions in Lithuania

Note: totals include ‘other payment service transactions’ (2020: 57.3 milllion). These include remittances, payments via telecommunication, digital or IT device, OTC cash deposits and OTC cash withdrawals.
Source: ECB.

5 – Leading Card Issuers in Lithuania

Note: In 2015, Danske Bankas sold its consumer card portfolio to Bankas Swedbank. Effective 2018, Citadele no longer issues American Express.
Source: PCM research

6 – Leading Acquirers in Lithuania

Note: NETS (DK) now acquires JCB card transactions in Lithuania. Citadele has ceased acquiring AmEx and acceptance is now very limited.
Source: PCM research

7 – ATMs and Cash Withdrawals in Lithuania

Source: ECB, Bank of Lithuania.

8 – POS Terminals in Lithuania

Source: ECB, Bank of Lithuania.

9 – Internet Use in Lithuania

Source: Eurostat, ITU, PCM research.

10 – Cards Issued in Lithuania

Source: ECB; Bank of Lithuania.

11 – Card Breakdown by Scheme in Lithuania

Note: total payment cards include few domestic cards; “other” were AmExp cards, which discontinued from 2018.
Source: Bank of Lithuania.

12 – Payments with Lithuanian Cards

Source: ECB, Bank of Lithuania.

13 – Cash Withdrawals with Lithuanian Cards

Source: ECB, Bank of Lithuania.

14 – Card Payments Per Capita in Lithuania

Source: calculated using ECB data.

15 – Payments with Lithuanian Debit Cards

Source: ECB, Bank of Lithuania.

16 – Payments with Lithuanian Credit Cards

Source: ECB, Bank of Lithuania.