"Consumers have obviously assessed banks' pricing and alternative possibilities in the payments market — banks lost their positions as leaders in cash payments, while payment and electronic money institutions are taking over an increasingly larger payments market share," says Member of the Board of the Bank of Lithuania, Marius Jurgilas.
In the second quarter of 2015, consumers in Lithuania made a total of over 13 million cash transfers or submitted transfers in paper form. From these transfers, payment institutions carried out 11.2 million, banks — 1.9 million transactions. Year on year the banks' market share contracted from 19.7% to 14.6%. Payment institutions increased their market share from 79.6% to 84.8%.
Competition has also been strengthening in the electronic transfers market. The number of electronic transactions at payment institutions has more than doubled over a year — to almost 2.5 million, while their market share held expanded from 3.8% to 6.6%. Banks carried out 34.7 million electronic credit transfers, an increase of 26% from last year; however, their market share decreased from 94.9% to 91.8%.
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 join the retail payment system. Currently such a possibility is only available to credit unions and banks.
Seeking to increase transparency and competition in the payments market, the Bank of Lithuania publishes the fees for the most often used payment services in Lithuania. Consumers have been provided with the possibility to compare the standard fees for payment services, which are applied by all banks operating in Lithuania, foreign bank branches, payment and electronic money institutions and credit unions. For consumer convenience, the providers of the cheapest services are also published. In addition, this Bank of Lithuania's website provides an opportunity to compare in graphic terms which credit, payment or electronic money institutions raised their fees the most and which of them cut them.
