LONDON, Sept. 8 (Reuters) – JPMorgan (JPM.N) has reached an agreement to buy a controlling stake in the payments business of German auto giant Volkswagen (VOWG_p.DE) ahead of the planned deployment of in-vehicle technology enabling drivers to pay for fuel or tolls.
The US bank has agreed to buy nearly 75% of Volkswagen Payments SA for an undisclosed amount, subject to regulatory approvals.
The Luxembourg company was founded in 2017 and operates in 32 countries. It offers car purchase and rental, on-board payment, electric vehicle refueling and recharging, and subscription services such as insurance and on-board entertainment.
JPMorgan said it plans to invest and re-brand the payments industry and expand its mobility-focused payments to other industries.
“One of the fastest growing platforms is the connected car market, where the car acts as a wallet to buy goods, services or subscriptions,” Shahrokh Moinian, head of wholesale payments, told Reuters for the EMEA region at JPMorgan.
Non-financial corporations, including automakers, have intensified their expansion in financial services in recent years.
Volkswagen’s financial services division will retain a 25.1% stake in the payments business, JPMorgan said. The agreement is expected to be finalized in the first half of 2022.
The Volkswagen Group did not provide a breakdown of profits from the payments business in its half-year results in July, but said sales of its financial services arm amounted to € 22.6 billion (26 , $ 77 billion), up 18% from the previous year.
($ 1 = 0.8444 euros)
Reporting by Iain Withers. Editing by Jane Merriman
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