Buy a Small Payment Institution in Lithuania

Buy-side mandate · Lithuania

Why a Lithuanian small payment institution

The Bank of Lithuania (Lietuvos bankas) authorises payment institutions under the Republic of Lithuania Law on Payment Institutions, which transposes Directive (EU) 2015/2366 (PSD2). The small payment institution (the regulator’s “licence for restricted activity”) is the Article 32 derogation. It carries the same supervisory rigour as the full PI on governance, AML, and safeguarding, but trades EEA passporting for a lighter authorisation footprint and a domestic-only operating perimeter.

For an acquirer, the question is not whether Lithuania is a credible PSD2 jurisdiction. It plainly is: the Bank of Lithuania supervised 119 EMIs and PIs at the close of 2024, serving 2.2 million active clients and generating EUR 571 million in licensed-activity revenue. The question is whether the small PI’s perimeter fits the buyer’s plan. For a domestic Lithuanian payments programme, a vertical-specific use case, or a bridgehead while a full PI authorisation is being prepared, it usually does. For an EU-wide passporting build, it does not, and the right answer is `/pi/lithuania/` (full PI) or an EMI.

Brief us on your Lithuanian acquisition

Licence scope

What a Lithuanian small PI permits, and what it does not

The small PI may provide six of the eight PSD2 payment services: cash placement and withdrawal on a payment account, execution of payment transactions (including direct debits, card transactions, and credit transfers), execution of payment transactions where funds are covered by a credit line, issuing or acquiring of payment instruments, and money remittance. The two services excluded by the Article 32 carve-out are payment initiation services (PIS) and account information services (AIS). If the acquirer’s roadmap requires open-banking PIS/AIS, the small PI is the wrong vehicle.

Two thresholds shape the regime in practice. First, the territorial restriction: a small PI may serve clients located in Lithuania only. There is no PSD2 passporting notification under Article 28; cross-border activity into another EEA member state forces the conversion to a full PI authorisation. Second, the volume cap: the 12-month rolling average of total executed payment transactions may not exceed EUR 3 million per month. The Bank of Lithuania monitors the rolling average from regulatory reporting; breach triggers an obligation to either apply for full PI authorisation or surrender the licence.

The PSD2 Article 32 derogation does not impose a fixed initial-capital floor (Articles 7 and 9 do not apply to small PIs). The Bank of Lithuania assesses prudential capital adequacy on a per-service basis under the Law on Payment Institutions and through ongoing supervision. Client funds must be safeguarded (segregated at a credit institution or covered by a comparable insurance policy or guarantee), and the safeguarding arrangement is reviewed as part of the change-of-control assessment when the licence changes hands.

What changes hands

What we broker: the entity, the regulatory standing, the operating substrate

A Cadena Brokers small PI mandate in Lithuania is the sale of the licensed legal entity together with its supervisory standing at the Bank of Lithuania, its safeguarding arrangements, its AML programme (compliance officer mandate, transaction-monitoring rulesets, risk-assessment, customer-identification procedures), the active correspondent banking relationships where these are transferable, the resident management team where retention is feasible, and where applicable the contractual book of merchant and corporate clients. The licence itself is not transferable as a paper title; what transfers is control of the company that holds it, conditional on the Bank of Lithuania’s non-objection to the qualifying-holding acquisition.

Every Lithuanian small PI we present has been pre-vetted on three axes. Supervisory standing: no open enforcement, no pending material remediation, capital and own-funds calculations current to the most recent quarter. Banking continuity: the safeguarding account and any operating correspondent relationships have been mapped, and we have a candid read on which counterparties will treat the change of control as a routine KYC refresh and which will not. AML programme: the compliance team, the policy stack, and the technology (sanctions screening, transaction monitoring, KYC tooling) are documented sufficiently for the buyer’s audit, and the resident AML officer’s continuity is addressed before signing.

The acquirer’s diligence focuses where it should: the qualifying-holding pack for the Bank of Lithuania (fit-and-proper questionnaires, source-of-funds documentation, group structure, business plan for the next three years), the operational handover schedule, and the post-closing supervisory commitments. A contrarian note worth stating plainly: a Lithuanian small PI looks inexpensive on the surface relative to a full PI, but if the buyer’s eighteen-month plan crosses the EUR 3 million monthly threshold or the Lithuanian border, the budget should already include the upgrade to a full PI authorisation. The small PI is a beginning, not a destination, for any buyer with EEA ambitions.

Process

How a Cadena buy-side mandate runs

We map your acquisition thesis to a shortlist of available Lithuanian small PIs that match scope and risk appetite, run the regulatory and banking-continuity diligence pack with you, and structure the share-purchase agreement around a closing conditional on the Bank of Lithuania’s qualifying-holding non-objection. Expedited closings are normal where the parties cooperate and the regulator’s queue is clear; we do not commit to a specific number of weeks because the regulator’s calendar is the binding constraint. See our process for the full sequence.

Why Cadena

Three reasons buyers brief us on Lithuania

Single-side mandate. We act for the acquirer only. We do not run a sell-side book on the same names, which removes the conflict that mixed-mandate intermediaries have to manage and gives the buyer the unfiltered diligence read.
The Bank of Lithuania pack from day one. Our diligence templates are calibrated to the Bank of Lithuania’s qualifying-holding assessment criteria (reputation, financial soundness, AML/CFT integrity, group structure), so the buyer’s submission is not redrafted at the regulator’s first review.
Banking-continuity intelligence. The hardest part of acquiring a Lithuanian small PI is not the Bank of Lithuania approval; it is keeping the safeguarding account and correspondent rails alive through change of control. We know which counterparties treat a buy-side acquirer favourably and which require a fresh relationship.

FAQ

Buyer questions on the Lithuanian small PI

What is a small payment institution licence in Lithuania?

A small payment institution (the Bank of Lithuania calls it a “payment institution licence for restricted activity”) is the PSD2 Article 32 derogation transposed into Lithuanian law. The small PI may provide most PSD2 payment services to clients in Lithuania only, subject to a 12-month rolling average of EUR 3 million per month in executed transactions. It is the lighter authorisation route compared with the full payment institution, and it does not benefit from PSD2 passporting into the rest of the EEA.

How does the Lithuanian small PI differ from a full payment institution?

Two material differences. Scope: the small PI cannot provide payment initiation services or account information services, while the full PI can offer all eight PSD2 services. Geography: the small PI is restricted to clients in Lithuania, while a full PI authorisation passports into every EEA member state under Article 28. Capital and own-funds: the small PI is not bound by the PSD2 Article 7/9 initial-capital regime, while the full PI is. For a buyer planning a domestic-only Lithuanian programme below the EUR 3 million monthly threshold, the small PI is the right vehicle; for anyone else, the full PI is the answer.

Can a Lithuanian small PI passport into other EEA member states?

No. PSD2 passporting under Articles 28 to 31 is reserved for fully authorised payment institutions. A small PI that wants to serve clients outside Lithuania must convert to a full PI authorisation first, which means a fresh application to the Bank of Lithuania satisfying the full PSD2 initial-capital and prudential regime. If the acquirer’s plan requires EEA reach from day one, buying a small PI is the wrong starting point.

How to obtain a payment institution licence in Lithuania: small versus full?

For a small PI, the application is filed with the Bank of Lithuania under the Republic of Lithuania Law on Payment Institutions and the supporting Bank of Lithuania resolutions, with a lighter document set and no fixed initial-capital floor. For a full PI, the application follows the PSD2 Articles 5 to 11 framework with initial capital set per the scope of services (EUR 20,000 for money remittance only, EUR 50,000 for payment initiation only, EUR 125,000 for the full payment-account services), full prudential reporting, and access to passporting. Acquiring an existing licensed entity replaces the application timeline with the qualifying-holding assessment timeline, which is normally shorter and less uncertain.

What changes hands when Cadena brokers a Lithuanian small PI?

The shares of the Lithuanian legal entity that holds the licence, together with its supervisory standing, safeguarding arrangement, AML programme, banking relationships where transferable, and the resident management where retention is feasible. The Bank of Lithuania’s non-objection to the qualifying-holding acquisition is a condition precedent to closing; without it, the share purchase does not complete. Our diligence pack and the buyer’s qualifying-holding submission are the two deliverables that determine the regulator’s timeline.

Open a mandate

Buying a Lithuanian small PI? Brief us.

Cadena Brokers represents acquirers (only acquirers) on Lithuanian small PI, full PI, and EMI acquisitions. Tell us the scope you need, the target volume in the first eighteen months, and the geography that matters. We will tell you whether the small PI fits, and if it does, which available names match.

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