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The U.S. banking giant said the deal would help it expand its digital payment capabilities and enter into the automotive industry for the first time.
Over time, the two companies plan to develop Volkswagen’s platform to cover markets outside the automotive sector, JPMorgan 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,” said Shahrokh Moinian, EMEA head of wholesale payments at JPMorgan, in a statement.
Financial terms of the deal were not disclosed.
Volkswagen has been pushing into the digital payments industry for some time now. The firm’s payments arm was established in Luxembourg in 2017. Its platform lets customers buy and lease cars and pay for parking tickets and electric vehicle charging, among other things.
The news did little to boost Volkswagen’s share price, which was down over 2% Wednesday amid a broad slump in European markets.
The German automaker’s payment division will come under the control of JPMorgan’s wholesale payments business. The transaction is expected to be finalized in the first half of 2022. JPMorgan hinted the two firms may change the branding of the venture following the deal’s completion.
It’s the latest in a string of acquisitions and investments by JPMorgan this year. The company agreed to buy British online wealth manager Nutmeg and OpenInvest, a San Francisco-based platform focused on ethical investments, in June.
Read More: JPMorgan to buy majority stake in Volkswagen payments unit