With the transaction, J.P. Morgan will expand digital payment capabilities and enter into the wide-ranging auto industry for the first time
J.P. Morgan to buy 75% stake in VWFS. (Credit: Volkswagen of America, Inc.)
J.P. Morgan has agreed to acquire a nearly 75% stake in Volkswagen Financial Services (VWFS), the carmaker’s payments platform, operated by Volkswagen Payments.
The transaction is said to expand the investment bank’s digital payment capabilities and enter into the wide-ranging auto industry for the first time.
Both the companies intend to develop the VWFS platform over time, to serve the new markets and industries outside of the automotive sector.
The transaction is expected to close in the first half of 2022.
Before closing, the two companies are expected to establish their joint operating model, with a strategy to open to other companies across the auto industry.
J.P. Morgan EMEA wholesale payments head Shahrokh Moinian 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.”
J.P. Morgan merchant services global head Max Neukirchen said: “Auto payments encapsulate many of the characteristics of the wallet of the future more generally. Partnering with a leader in the field gives us a great opportunity to be at the heart of that.”
Established in 2017, Volkswagen Payments is a payments platform designed for the auto industry, operating in 32 markets worldwide.
It offers digital payments services including initial purchase and leasing, in-vehicle payments, fuelling and electric vehicle charging, parking and subscription-based services.
Volkswagen Payments is focused on digitally connecting the auto ecosystem and improving the payments experience for consumers, distributors and suppliers alike.
The platform is said to complement J.P. Morgan’s Wholesale Payments business.
The business combines corporate treasury services, trade finance, card and merchant services capabilities, and delivers an integrated payments experience to end-users.
Volkswagen Group sales head Christian Dahlheim said: “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.”
Volkswagen Financial Services CIO Mario Daberkow said: “We are proud of the successful setup and operation of Volkswagen Payments S.A. and, as a strong shareholder, we will ensure that it continues to support the Volkswagen Group and its brands with tailor-made and innovative solutions and services in the field of digital payments.”