American investment bank JPMorgan has agreed to buy a nearly 75 percent stake in Volkswagen Payments S.A. for an undisclosed sum, pending regulatory approvals.
The German automaker‘s finance division will retain a 25.1 percent stake in the business, reports Reuters. The business, which was first set up in 2017, offers car purchase and leasing services, as well as in-car payments for fueling and EV charging, and in-vehicle entertainment.
JPMorgan says it plans to invest in and rebrand Volkswagen Payments S.A. and grow the mobility aspect of the company to other industries.
Read Also: Goldman Pulls Trigger On GM’s Credit Card Unit For $2.5 Billion
“One of the fastest-growing platforms is the connected car marketplace, whereby the car acts like a wallet for purchasing goods, services, or subscriptions,” Shahrokh Moinian, EMEA head of wholesale payments at JPMorgan, told Reuters.
A number of automakers, like GM with OnStar, have moved to offer in-car payments. The business has been seen as a way to eke more money out of vehicles that are increasingly complex and expensive to build. As autonomous car technology advances, the technology is only expected to grow in importance.
Some automakers have been criticized for trying to expand in-vehicle purchasing to include features. BMW, for instance, announced in 2020 that it would offer customers a chance to pay month-by-month for heated seats. It even said that safety features, like automatic high beams and adaptive cruise control, could be offered as an ongoing service. Similarly, Volkswagen Payments S.A. writes that its goal is to eventually offer “Functions on Demand.”
Although the value of the deal is not yet public, it is expected to close in the first half of 2022.
