The deal is expected to close in the first half of 2022
J.P. Morgan teamed up with Volkswagen Financial Services. Source: shutterstock.com
J.P. Morgan has announced a partnership with Volkswagen Financial Services.
In the strategic deal, J.P Morgan will acquire close to 75% in Volkswagen’s payment platform. The platform is run by Volkswagen Payments S.A.
The investment deal will increase J.P Morgan’s remittance capabilities. In turn, this will boost the accessibility of the platform to the broader auto industry. The investment between the two companies will lead to further development of the platform to accommodate new industries and markets. However, Volkswagen Financial Services will still be a shareholder in the payment platform.
Volkswagen Payments S.A, which was founded in 2017 in Luxembourg, operates a remittance platform that is specifically tailored for the auto industry. The platform operates in 32 markets globally and offers a range of payments services.
Some of these services include in-vehicle payments, initial leasing & purchase, electric vehicle charging and fuelling, in-vehicle entertainment among other subscription services. The platform is focused on improving the remittance experience for distributors, consumers and suppliers. It also focuses on the connection of the auto ecosystem digitally.
According to the press release, it is a perfect fit for J.P Morgan’s wholesale remittance business. This is because it combines trade finance, corporate treasury services, merchant and card services capabilities. It also provides an integrated remittance experience to the users.
Luxembourg remains the key European location for J.P Morgan. As such, Volkswagen Payments S.A will be based in the location.
The deal comes as consumers search relentlessly for a seamless digital remittance experience in all sectors and industries. In 2021 alone, the in-car remittances will reach $4 billion in 2021. In the future, the customized remittance services and digital remittances are set to become core features by J.P Morgan’s business models.
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