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Lithuania: Locations with Cash Withdrawal Facilities Set to Double

Categories : Cash does not require a technology infrastructure, Cash is a public good
July 9, 2021
Published in : ATM, Cash Infrastructure, Central Bank, Lithuania
Under a memorandum signed by the Bank of Lithuania and financial institutions, the number of localities with cash withdrawal facilities is set to double within one year.
Guillaume Lepecq

Chair, CashEssentials

With ATMs currently up and running in 91 localities, within a year, access to cash should be extended to at least 191 residential areas under the Memorandum of Understanding for Ensuring Access to Cash in Lithuania.

The Bank of Lithuania and the Association of Lithuanian Banks signed the memorandum with Swedbank AB, AB SEB bankas, AB Šiaulių bankas, the Lithuanian branches of Luminor Bank AS and AS Citadele banka, Revolut Payments, UAB, and the Lithuanian Central Credit Union.

Per Value, 62% of  Payments are Made in Cash

According to the European Central Bank Study on the payment attitudes of consumers in the euro area (SPACE), cash accounts for 62% of the value of all Point of Sale and Person-to-Person transactions in Lithuania, significantly more than the euro area average of 48%. However, in terms of the number of transactions, Lithuania sits slightly below the euro area average with 68% versus 73%. A share of 4% of Lithuanians reported that they only have access to cash, and no other means of payments, compared to a euro-area average of 2%.

Source: European Central Bank Study on the payment attitudes of consumers in the euro area (SPACE)

Over 15% of the population perceive access to ATM withdrawals as fairly difficult or very difficult, significantly above the euro area average of 9% (SPACE). According to the Bank of Lithuania, on June 9, 2021, 1,044 ATMs functioned in the country and were available within 5 kilometres for 73% of the population and within 10 kilometres for 82% of residents.

Source: European Central Bank Study on the payment attitudes of consumers in the euro area (SPACE)

“Despite the gradual decline in its use, cash still remains an important means of payment at the country’s points of sale and between natural persons. Therefore, we have taken leadership to mobilise financial market participants and agreed on this Memorandum in order to ensure sufficient access to cash for all residents,” said Gediminas Šimkus, Chairman of the Board of the Bank of Lithuania.

“This Memorandum is a perfect sign of unity and solidarity of the financial community and an example of close cooperation with the Bank of Lithuania. In our view, a voluntary agreement is an alternative that conforms to international practice and is healthier for competitive environment, compared to previous proposals to legally bind certain financial market participants to take up this function,” said Dr. Eivilė Čipkutė, President of the Association of Lithuanian Banks.

Source: Lietuvos Bankas, Bank of Lithuania

One Cash Access Point within 10 km for 90% of the Population

Having signed the Memorandum, financial market participants committed themselves to ensure, within one year (by July 1, 2022), availability of at least one cash withdrawal point (ATM or equivalent access point) within 10 kilometres from the declared place of residence for at least 90% of Lithuania’s population, or within 20 kilometres for 99% of the population.

The expansion of the cash access points’ network will be concentrated in localities with up to 4,000. Access to cash will be ensured using ATMs or alternative cash service points (e.g., cash withdrawal services provided by bank partners at points of sale). The conditions put in place for such cash withdrawal services are equivalent to those applied to ATMs. Localities with a population of more than 2,000 and no cash withdrawal points available within 10 kilometres will have an ATM installed. ATMs should be set up in at least 50 new localities, with other solutions possible in other residential areas.

Moreover, the conditions of residents’ access to cash will be improved:

The Association of Lithuanian Banks has already taken steps to implement the Memorandum and launched a selection procedure to build a team of independent experts to develop a model for implementing the Memorandum, which would be unbiased, comprehensible, and compliant with competition laws. The experts will help establish fair and balanced ways for the Memorandum participants to fulfill its criteria.

The Bank of Lithuania will be notified of any significant changes in the network of cash access points. Moreover, the central bank will monitor compliance with the commitments assumed under this Memorandum and consult banks on its provisions’ practical implementation. In addition, the Bank of Lithuania will publish a map of cash withdrawal points on its website. It will also issue an annual review on access to cash in Lithuania.

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