On 1 June 2022, the decision of the Bank of Lithuania (the BoL), stipulating that subjects which are benefiting from limited network exclusion under the Second Payment Services Directive (PSD2) are obliged to resubmit a notification to the BoL, entered into force.
The notifications based on the provisions of the guidelines prepared by the European Banking Authority (the Guidelines) must be submitted to the BoL until 1 September 2022.
Exclusions from the scope of PSD2
The Lithuanian Law on Payments contains provisions which implement the PSD2. They provide for exclusions from the law for payment instruments that can be used in a limited way. Such limitations include:
- Payment instruments allowing the holder to acquire goods or services only on the premises of the issuer or within a limited network of service providers under direct commercial agreement with a professional issuer
- Payment instruments which can be used only to acquire a very limited range of goods or services
- Instruments valid only in a single member state provided at the request of an undertaking or a public sector entity and regulated by a national or regional public authority for specific social or tax purposes to acquire goods or services from suppliers having a commercial agreement with the issuer
Until recently, there was a lot of uncertainty as to what payment instruments could be considered excluded based on limited network exclusion under PSD2. The Guidelines clarify not only what is a limited range of goods or services, what is considered a limited network of service providers and what are considered the premises of the issuer, but also specify what information should be additionally provided in a notification in order for the competent authority to properly assess whether the issuer can benefit from limited network exclusion.
Usually, the payment instruments that benefit from this exclusion are gift cards, shopping centre cards, transportation cards, fuel cards and similar instruments. It should be noted that under the Law on Payments the notification obligation applies only in cases where the total value of payment transactions with the respective payment instrument in the last 12 months exceeds EUR 1 million. The issuer has to submit the notification to the competent authority for where the users of the payment instrument are located and indicate under which limited network exclusion the issuer is operating. Such a notification must be made within one month of the threshold of EUR 1 million being reached.
Subjects already benefiting from limited network exclusion and included in the public list are obliged to resubmit a notification to the BoL in accordance with the new Guidelines by 1 September 2022. Issuers of payment instrument who wish to benefit from this exclusion have to follow the requirements specified in the Guidelines when submitting their notification. See the full Guidelines here.