JPMorgan Acquires Majority Stake in Volkswagen Payments Business


Dive brief:

  • JPMorgan Chase plans to acquire a majority stake of nearly 75% in Volkswagen Financial Services, the payment platform of the German automaker, the bank said on Wednesday.
  • The New York-based bank said the deal, which is expected to close in the first half of 2022, will expand the bank’s digital payment capabilities and “will see the platform extended and accessible to the entire auto industry. for the first time “. Financial terms of the deal were not disclosed.
  • The deal comes as the country’s largest bank continues to run a “aggressiveAcquisition Strategy CEO Jamie Dimon hinted last year.

Dive overview:

JPMorgan called Volkswagen’s payment platform “a natural fit” for the bank’s wholesale payments business, which combines corporate treasury, trade finance, card and merchant services.

The bank said that over time, the alliance between the two companies will seek to develop the platform for new markets and industries outside of the automotive sector “where mobility-driven payments will become central.”

Volkswagen Financial Services will remain a shareholder and the platform will continue to facilitate payments across the Volkswagen network to support all of the Volkswagen Group brands around the world, the bank said.

“We plan to build on the innovative foundation of Volkswagen Financial Services on the existing platform and apply our payments expertise globally to meet changing customer expectations in the automotive industry and beyond. ”, Shahrokh Moinian, Wholesale Manager for Europe, Middle East and Africa. payments to JPMorgan, said in a statement.

The agreement precedes a plan to deploy on-board technology that allows drivers to automatically pay for fuel or tolls, Moinian told Reuters Wednesday.

“One of the fastest growing platforms is the connected car market, where the car acts as a wallet to buy goods, services or subscriptions,” he said.

Volkswagen Payments SA, which was founded in 2017, operates in 32 markets and will remain Luxembourg-based, the bank said in a statement.

JPMorgan’s latest acquisition comes as onboard payments are expected to hit $ 4 billion in 2021, according to a Grand View Research study.

The deal is the latest in a series of investments made by the country’s largest bank over the past year, following Dimon’s promise at the bank’s 2020 annual investor meeting that he would be “much more aggressive with acquisitions at all levels. “

The bank has made more than 30 acquisitions this year, according to the Financial Times, which cited data from Refinitiv.

Among the bank’s high-profile deals over the past year was the purchase of fintech 55ip in December, a Boston-based startup that helps financial advisors automatically create tax-efficient portfolios.

In June, JPMorgan agreed to buy UK digital wealth management platform Nutmeg for £ 700million ($ 972.8million). This deal comes like the bank recognized it would launch a digital banking platform in the UK this year.

The bank is also considering purchasing San Francisco-based OpenInvest for an undisclosed amount, on bank announced in June. OpenInvest, which helps finance professionals personalize and account for value-based investments, will retain its own brand and be integrated into JPMorgan Chase’s private banking and wealth management offerings, the companies said.

JPMorgan also turned to the Brazilian market. The bank announced in June he plans to take a 40% stake in Brazilian digital bank C6. Financial terms of the transaction were not disclosed.

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