The Bank of Lithuania approved Röntgen, the crowdfunding platform, to open dedicated payment accounts for its customers. This innovation will increase the security of the funds of investors and enable the further improvement of the investment experience. Röntgen will operate under the EMI license umbrella of Verified Payments.
Röntgen will expand their services
Martynas Stankevičius, the head of the Röntgen, says that it is the first partnership in Lithuania of this kind. A crowdfunding platform and an electronic money institution previously never joined forces to meet regulations. According to him, this solution solves many administrative and efficiency problems and, most importantly, allows creating additional value for investors.
“First of all, this innovation will further increase the protection of our investors. Their funds will be stored in Verified Payments. Also, our customers will avoid situations where they have to make dozens or hundreds of individual transfers to investors. Even more, this agreement opens new opportunities for our platform to develop new features. For example, we will be able to launch a more efficient secondary loan market or automatic investment. These features are coming later this year. Finally, we will have the benefits of owning an EMI license without actually having it. We will operate under the license of Verified Payments – it is much more efficient than acquiring it for ourselves,” says M. Stankevičius.
He notes that new integration will be invisible and will not result in additional costs for customers.
Great example of embedded financial services
This partnership is a great example of how two institutions with different licenses join forces to create an advanced solution.
“Embedded financial services are a new phenomenon in Lithuania, but globally it is becoming a new norm. Many non-financial businesses such as Tesla, Starbucks, or Uber have already integrated payment, insurance, or banking solutions into their services. It allows them to provide their customers with better, safer and more convenient services. While at the same time they grant themselves an additional source of income”, says Mantas Staliūnas, the head of Verified Payments.
According to him, it is easier for businesses to embed financial services through partners than to start providing them themselves.
“It allows companies to focus on product development, growth, or customer acquisition. There is no need to bother with licensing or take care of compliance. This is done by a partner that provides the financial solution. For example, Apple has partnered with Goldman Sachs to introduce payment cards. Their partnership made it easier for customers to pay for their purchases. Now Apple – a non-financial company – is the largest mobile payment platform in the United States”, explains M. Staliūnas.
Affordable alternative to EMI license acquisition
Until now, Lithuanian crowdfunding companies have offered quite complex investor fund management mechanisms. Consumers themselves had to create new payment accounts themselves or transfer money to the borrower’s limited-use accounts, which were managed by platform operators under tripartite agreements.
To protect investors the Lithuanian law has restricted the possibility for crowdfunding platform operators to keep investors’ money on their balance sheets unless they have obtained licenses for electronic money institutions. Due to the high cost and complicated procedures, only a few Lithuanian crowdfunding platforms have chosen the latter solution. According to the head of Röntgen, the integrated banking solution implemented together with Verified Payments will allow the platform and its users to enjoy all the benefits of an electronic money institution without excessive administrative costs.
About Röntgen
Röntgen is one of the largest real estate financing platforms in the country, supervised by the Bank of Lithuania. Since the platform was launched in January 2018 Röntgen mobilized more than 20 million EUR of investments. The platform unites more than 9,000 investors.