JPMorgan strikes a deal to buy a majority stake in the leading German car manufacturer Volkswagen’s payments business. This deal is ahead of a planned rollout of in-car technology that provides drivers with the choice to pay for fuel or tolls automatically. The leading U.S. bank JPMorgan has agreed to buy close to 75% of Volkswagen Payments S.A. for a price yet to be disclosed, subject to regulatory approvals.
The Luxembourg-based business was founded in the year 2017 and operates across 32 countries. The business offers car purchase and leasing, fuelling and electric vehicle charging, in-vehicle payments, and subscription services such as in-vehicle entertainment, insurance, etc. JPMorgan also stated that it intends to invest in and rebrand the payments business and expand its mobility-focused payments to other fields and industries.
Shahrokh Moinian, who holds the office of the EMEA head of wholesale payments at JPMorgan, told Reuters that one of the fastest-growing platforms is the connected car marketplace, whereby the car acts like a wallet for purchasing services, goods, or subscriptions. In recent years, non-finance companies, including car manufacturers, have taken measures to expand further into financial services.
JPMorgan said that the car manufacturing giant’s financial services division would retain a 25.1% stake in the payments business. The majority stake acquisition deal with Volkswagen is expected to close in the first half of 2022.
Volkswagen Group did not disclose or provide a breakdown of earnings for the payments business in its half-year results in July 2021 but said sales at its financial services arm were 22.6 billion euros ($26.77 billion), up 18% on the prior year.