On Wednesday, JP Morgan said that it has a plan to buy plans to buy a majority stake of close to 75% of Volkswagen Payments business. The firm’s payments arm was established in Luxembourg in 2017 and manages work across 32 countries. It provides various customers to buy car and leasing, in-vehicle payments, fuelling, and electric vehicle charging, along with subscription services such as insurance and in-vehicle entertainment.
JP Morgan plans to invest in and change the image of the payments business and lengthen its mobility-focused payments to other industries. For the first time, the deal would help to enter into the automotive industry and would help in expanding the digital payment methods said the U.S. banking giant.
Shahrokh Moinian, EMEA head of wholesale payments at JP Morgan said in a statement to Reuters, “We plan to build on Volkswagen Financial Services’ innovative groundwork on the existing platform and apply the global scale of our payments expertise to meet evolving customer expectations in the auto space and beyond.”
“One of the fastest-growing platforms is the connected car marketplace, whereby the car acts like a wallet for purchasing goods, services or subscriptions.” Shahrokh Moinian added according to Reuters. Yet the financial terms of the deal were not revealed.
Volkswagen’s financial services division will continue to have a 25.1% stake in the payments business, JP Morgan said. Whereas the deal is expected to close in the first half of 2022.
However in its half-year result in July the Volkswagen Group did not give any information about the breakdown of earnings for the payments business but said that sales at its financial services arm were 22.6 billion euros ($26.77 billion), up to 18% on the prior year.