Israeli payments firm joins many who see Lithuania as their gateway to EU

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Nayax, a Tel Aviv-based provider of cashless payment systems for the unattended retail market, has been granted a Payment Institution (PI) license by the Bank of Lithuania. The license, which allows Nayax to process cross-border remittances to its merchant clients, is passportable across the European Union (EU) and the European Economic Area (EEA).

The Bank of Lithuania has been courting fintechs which need an EU payments or banking license to operate in Europe. In July 2018, it introduced an e-licensing tool that makes it cheaper and quicker to submit the information necessary to obtain an operating licence.

Nayax plans to set up its European subsidiary, Nayax Europe UAB, in Lithuania.

The Payment Institution license, issued by the Bank of Lithuania, provides Nayax with the ability to offer its payments services directly to the approximately 23 million small and medium-sized enterprises across the EU.

“Nayax Europe's Payment Institution license lets us handle B2B remittances – forwarding payments made by consumers at our operators' unattended retail terminals — to the owners/operators of these machines,” said Lisa Appelson, a marketing communications executive at Nayax in Israel.

Nayax has chosen to just perform remittances under the terms of its Payment Institution license, Appelson added.

Under PSD2 and the U.K.’s Open Banking regulations, an AISP license allows fintechs to access bank customer data, while a PISP license grants access to the customer’s account to initiate payments. In both cases, customers need to give explicit consent.

Nayax provides VPOS contact-based and contactless card readers and management software for unattended payment terminals such as vending machines, photo booths, self-service kiosks, children’s rides and laundromats.

The company has over 250,000 VPOS devices installed in 65 countries on a range of unattended terminals, and handles transactions in 26 currencies. Its payments platform is connected to 40 banks and payment processors, providing a one-stop-shop solution which means that unattended terminal operators have no need to deal with acquirers or telecoms networks.

“Nayax provides complete payment processing services in Europe including EMV-based Visa and Mastercard, as well as Apple Pay and dominant regional mobile payment services such as TWINT and MobilePay,” said Appelson. TWINT is a popular digital wallet in Switzerland, while MobilePay is a bank app for mobile payments in Denmark and Finland.

Nayax has developed a proprietary mobile app, Monyx Wallet, which lets operators communicate directly with consumers and offer them loyalty rewards.

“The Monyx app works with Nayax’s cashless vending system, and all the operator’s promotions can be configured from Nayax's Management Suite software,” said Appelson. “Monyx Wallet has over 50,000 active users, the majority within a closed-loop system, who purchase products from operators. These users can connect their credit card or prepaid card to the app to perform payment transactions. Monyx Wallet also enables instant and remote refunds.”

Europe's vending machine technology is lagging that of other regions.

“I estimate that the total number of smart vending machines installed in Europe is over 130,000,” Nick Finill, senior research analyst, smart retail at ABI Research. “This compares with 1.6 million in North America and 370,000 in Asia-Pacific.”

According to ABI Research’s report Smart Vending Trends and Market Opportunities, Intel, Swyft, Nayax, and Sierra Wireless are the leading players in the smart vending market, in addition to emerging players such as Invenda, DeepMagic, and DeepBlue Technology.

“Smart vending is emerging as an additional retail channel offering unique benefits versus traditional brick-and-mortar retail and e-commerce,” the report said. “Intelligent vending machines and automated retail units, equipped with advanced customer and operational analytical capabilities, offer immediate convenience to the customer while enabling additional revenue streams to be exploited by operators and partners.”

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Compliance Cross border payments Lithuania Israel