London — JP Morgan contracts to purchase a majority stake in the settlement business of German car giant Volkswagen prior to the planned rollout of in-vehicle technology that allows drivers to automatically pay fuel and tolls Tie.
US banks have agreed to purchase nearly 75% of Volkswagen Payments SA for private amounts, subject to regulatory approval.
The Luxembourg-based business was founded in 2017 and operates in 32 countries. We offer subscription services such as car purchase and leasing, in-car payments, refueling and electric vehicle charging, insurance and in-car entertainment.
JP Morgan said it plans to invest in the payments business to rebrand and expand mobility-focused payments to other industries.
“One of the fastest growing platform is the connected car market, which allows cars to act like wallets for purchasing goods, services, or subscriptions,” JP said. Shahrokh Moinian, Morgan’s Head of Wholesale Payments for EMEA, told Reuters.
In recent years, non-financial companies such as automobile manufacturers are accelerating their entry into financial services.
Volkswagen’s financial services sector will hold a 25.1 percent stake in the settlement business, JP Morgan said. The transaction is expected to close in the first half of 2022.
The Volkswagen Group did not provide a breakdown of its settlement business revenues in its first half of July, but said financial services revenue was up 18% year-on-year to € 22.6 billion ($ 26.77 billion).
($ 1 = 0.8444 euros)