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JPMorgan entered a deal to acquire an almost 75% stake in Volkswagen’s payments business, Volkswagen Payments S.A. The agreement comes prior to the firm’s rollout of its new in-car technology that will let drivers pay for tolls and fuel automatically.
JP Morgan, a global leader in financial services offering solutions to the major corporations, governments, and institutions worldwide, agreed to buy a majority of stake in Volkswagen Payments. Then again, the acquisition is still subject to approvals of the government regulator and as for the amount of the deal, it was not disclosed as of this time, as per Reuters.
The Luxembourg headquartered fintech firm that provides solutions for digital financial services was first established in 2017 and currently operating in around 32 countries. Its business is mostly offering assistance on car purchase and leasing, fuelling, in-vehicle payments, electric vehicle (EV) charging, and other subscription services including insurance and in-vehicle entertainment.
Now, with the acquisition, the American financial company said it is planning to invest and rebrand Volkswagen Payments’ business and extend it to mobility-focused payments in other industries. As posted, Volkswagen will be retaining a 25.1% stake in its payments business and its deal with JPMorgan is expected to close within the first two quarters of 2022.
Moreover, CNBC reported that JPMorgan is also looking to enter the automotive industry after successfully expanding its digital payment capabilities through Volkswagen Payments. The bank further stated that they will also develop Volkswagen’s platform to accommodate more markets beyond the field of automotive.
“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,” JPMorgan’s Europe, Middle East, and Africa (EMEA) head of wholesale payments, Shahrokh Moinian, said in a statement.
Meanwhile, it was revealed that for some time now, the German carmaker has been working to further push its digital payments business to cover various industries, and this was why it launched its payments platform. Thus, the deal with JPMorgan is a strategic decision to attain its goal.
