"Competitive rivalry in the field of payments strengthened last year, which is good news for consumers. Payment and e-money institutions, with their increasingly significant role in this market, are not lowering gear this year either. Thus it is likely that, if no significant changes in banks' pricing, favourable for consumers, occur, the re-distribution of the payments market will follow a similar path this year as well," says Marius Jurgilas, a member of the Board of the Bank of Lithuania.
In 2014, consumers in Lithuania made a total of over 60 million cash transfers or transfers in paper form. In these transfers, 47.8 million transactions were carried out at payment institutions and 12.4 million at banks. Banks' market share in terms of the number of such transfers contracted from 24.4% in 2013 to 20.5% this year. The market share of payment institutions expanded from 74.9 to 78.8% accordingly. The situation of credit unions, at which 0.4 million similar transactions were performed last year, remained basically unchanged, with their share accounting for 0.7% of a total of such transfers.
Over 115.9 million other popular payments – electronic credit transfers – were carried out last year, an increase of 9% year-on-year. 109 million of these transactions in 2014 were performed at banks, a year-on-year increase of 5%. The number of electronic money transfers at payment and e-money institutions almost tripled over the same period – to 6 million. These changes also caused the redistribution of market shares. In the electronic transfers market, the share of banks shrank from 97% in 2013 to 94% in 2014; the transfers' share of payment and e-money institutions increased from 2% in 2013 to 5.2% in 2014. The market share of credit unions remained unchanged to account for 0.6%. 0.7 million e-transfers were made last year at them, an increase of 9% from the year before last.
According to Jurgilas, competition in the electronic transfers market will intensify even more when the Bank of Lithuania, after implementing necessary changes in the payment system, will create the conditions for payment institutions to indirectly join the retail payment system. Presently such a possibility is only available to credit unions and banks.
