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VW’s payments business facilitates purchasing electric vehicle charge-ups.
Jens Schlueter/Getty Images
JPMorgan
will take control of the payments business run by
Volkswagen
Group, moving into a fast-growing part of the automobile sector that allows people to pay for the likes of parking, charging for electric vehicles, and in-car entertainment.
The news failed to boost Volkswagen (VOW) stock, which was down 2.4% in Frankfurt trading amid a wider slump in European stocks on Wednesday. JPMorgan (JPM) shares were down 0.4% in the U.S. premarket.
The deal, for an undisclosed sum, will see the U.S. investment bank acquire a controlling interest of close to 75% in the payments platform owned by the German auto giant’s financial services division. The acquisition is expected to be completed in the first half of next year, subject to regulatory approvals.
Volkswagen’s payments business, founded in Luxembourg in 2017, operates in 32 markets around the world and offers a range of digital payment services. It allows customers to buy cars or take out leases, pay for parking as well as fuel and electric-vehicle charging, make in-vehicle payments, and purchase subscriptions like insurance and in-car entertainment.
It’s an increasingly important part of the auto sector, with the in-vehicle payment market alone expected to reach $4 billion in 2021, according to market research group Grand View.
Volkswagen is the world’s second-largest auto maker. Its brands include its namesake as well as Audi,
Porsche,
Bentley, and Lamborghini.
The two companies said in a press release that the deal will expand JPMorgan’s capabilities in digital payments while allowing Volkswagen’s platform to be extended and accessible across the rest of the auto industry for the first time. Later, the platform will be developed for new markets and industries to take advantage of mobility-focused payments, the groups said.
“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,” said Shahrokh Moinian, the head of wholesale payments for the Europe, Middle East, and Africa region at JPMorgan.
Write to Jack Denton at [email protected]
