The headquarters of JP Morgan Chase & Co., the JP Morgan Chase Tower on Park Avenue, Midtown, Manhattan, New York.
Tim Clayton – Corbis | Corbis Sport | Getty Images
JPMorgan announced on Wednesday that it would acquire a majority stake of nearly 75% in Volkswagen’s payments business.
The US banking giant said the deal would help it expand its digital payment options and get into the auto industry for the first time.
Over time, the two companies plan to develop Volkswagen’s platform to cover markets outside of the automotive sector, JPMorgan said.
“We plan to build on the innovative basis of Volkswagen Financial Services on the existing platform and use the global reach of our payment transaction know-how to meet the evolving customer expectations in the automotive sector and beyond,” said Shahrokh Moinian, EMEA Head of Wholesale Payments at JPMorgan, in a statement.
Financial terms of the transaction were not disclosed.
Volkswagen has been pushing into the digital payments industry for some time. The company’s payment branch was founded in Luxembourg in 2017. On its platform, customers can, among other things, buy and lease cars, pay for parking tickets and charge electric vehicles.
The news did little to boost Volkswagen’s share price, which fell over 2% on Wednesday amid a broad slump in European markets.
The German automaker’s payments division will come under control of JPMorgan’s wholesale business. The transaction is expected to close in the first half of 2022. JPMorgan indicated that the two firms could change the company’s branding after the deal is complete.
It is the latest in a series of acquisitions and investments by JPMorgan this year. The company agreed to purchase UK online wealth manager Nutmeg and OpenInvest, a San Francisco-based platform focused on ethical investing, in June.