To provide more possibilities to choose and higher protection for consumers and to ensure the development of services, Lietuvos bankas presents a proposal for a payments market strategy up to 2030. It highlights three main areas: security and resilience, accessibility of services, and customer mobility and innovation. Lietuvos bankas invites interested parties to look through the proposals and express their opinion.
“Payments are the ‘blood stream’ of a country’s economy and financial system. Cutting-edge technologies and digitalisation provide a broad spectrum of new opportunities for consumers. Payment service providers must be prepared to offer them, without leaving behind the consumers who find it more difficult to adapt. In addition, the war against Ukraine and the threat of cyberattacks as well as the relevance of the fraud problem has led to the need to pay close attention to strengthening the security and resilience of payment infrastructure,” says Gediminas Šimkus, Chair of the Board of Lietuvos bankas.
The past decade has seen many significant developments as Lithuania became a member of the euro area and the single euro payments area (SEPA), thus gaining access to standardised European payment schemes and systems. This contributed to the rapid market growth: Lithuanian users gained access to new payment services such as instant payments, now widespread in Lithuania, along with the development of open banking (payment initiation, account information services). Banks and credit unions were joined by new market participants, such as electronic money and payment institutions.
Payment habits also changed as the population and businesses increasingly began to use electronic payment services. In 2017, there were 160 domestic cashless payments per capita in Lithuania compared to 409 in 2024. During this period, the number of domestic card payments initiated in Lithuania increased from 277 million to 587 million, and the number of credit transfers made rose from 180 million to 476 million. Instant payments are especially gaining popularity: at the beginning of 2024, they accounted for 72% of all interbank payments in Lithuania, while the average for the euro area countries was merely 18%.
Over the course of a decade, there was also a number of new challenges. In 2024 alone, the Lithuanian banking sector registered over 13,000 cases of fraud of the total value of about €20 million. One of the ways to combat payment fraud is the verification of a payee service. It will let the payer know if the payee’s account actually belongs to the payee entered by the payer before confirming the payment. This service will protect some consumers from transferring funds to fraudulent accounts but it is not enough as such, and Lietuvos bankas therefore invites payment service providers to discuss the usage of additional fraud prevention measures.
The strategy also analyses the possibilities of payments in emergency situations. A solution for paying with payment cards without an internet connection is already being developed. The aim is to ensure that such solutions could be used in the event of significant power or communications disruptions.
In Lithuania, it is currently quite easy to open an account and use payment services remotely. For many consumers, this adds value, but as payments increasingly move to the digital space, the possibilities for residents to use physical customer service locations diminish. This often adversely affects the accessibility of financial services to socially vulnerable groups in our society. Lietuvos bankas seeks to
find solutions acceptable to all parties and establish best practices to ensure that payment services are available to the entire population.
Lietuvos bankas also proposes to boost the possibilities for customer mobility. This can be achieved by making it easier for consumers to switch payment service providers if they are not satisfied with the service. Increased transparency of service fees and access to this information would encourage a more frequent assessment of services.
In order to promote the development of payment services, Lietuvos bankas emphasises the importance of the usage of European payment schemes, solutions and infrastructure as a basis for innovation. For example, payment solutions based on instant payments as already used in other European countries could be an alternative to card payments at physical points of sale. A general consensus among market participants is also expected in order to effectively implement SEPA request to pay service where the recipient of funds (e.g. a service provider or a public body) sends a pre-formed payment order to the payer with information on what the payment is requested for. In this case, the payer would only need to confirm the payment.
Anyone interested in the topic of payments, including payment service providers, authorities, consumers and businesses, is invited to participate in the consultation and express their opinion on the Lithuanian payments market strategy up to 2030. The consultation will take place until 23 May. Please submit your views and suggestions by email to payments-strategy@lb.lt.
Source: lb.lt