JPMorgan will buy close to 75% of the Volkswagen payments business for an undisclosed amount in the deal expected to close in the first half of 2022 subject to regulatory approvals and when the two companies plan to develop their joint operating model.

The Strassen-based business, Volkswagen Payments S.A., operates a payment platform designed for the automotive industry and covers payments for initial purchase and leasing, in-vehicle payments, fuelling and electric vehicle charging, parking and subscription-based services such as insurance and in-vehicle entertainment. Its payment activities thereby allow customers pay for parking tickets, car sharing, electricity, fuel or toll.

"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, EMEA Head of Wholesale Payments at JPMorgan.

"With its many years of banking experience and global market presence, J.P. Morgan is the ideal partner for Volkswagen Payments S.A. to implement the requirements of the Volkswagen Group's brands for customized automotive payment solutions worldwide," added Dr. Christian Dahlheim, Head of Volkswagen Group Sales.

Following a growing interest for a seamless digital payment experience in various industries and sector, JPMorgan foresees a significant opportunity for global growth with in-car payments alone predicted to reach $4 billion in 2021. 

The deal itself is expected to broaden both the bank’s digital payment capabilities and see the platform grow and become more accessible to the broader auto industry. In the long-term, an expansion to new markets and industries outside of the automotive sector is envisaged.

“J.P. Morgan expects that the connected vehicle, the digital payments experience and customized payment services, will all become core features of business models in the future” it emphasised.

The subsidiary will continue to operate in Luxembourg, where JPMorgan has a “proud history of supporting clients for over 45 years,” and the platform will integrate with JPMorgan’s wholesale payments business. Volkswagen Financial Services will remain a shareholder with about 25% stake and the platform will continue to facilitate payments across the Volkswagen network in support of all Volkswagen Group brands globally.

Volkswagen Payments S.A. was founded in 2017 and operates in 32 countries. JPMorgan works with clients in over 100 countries and reports $32.1 trillion of assets under custody and $722 billion in deposits.