LONDON -- JPMorgan has struck a deal to buy a majority stake in German car giant Volkswagen's payments business ahead of a planned rollout of in-car technology that allows drivers to automatically pay for fuel or tolls.
The U.S. bank on Wednesday said it agreed to buy 75 percent of Volkswagen Payments for an undisclosed sum, subject to regulatory approvals.
The Luxembourg-based business was founded in 2017 and operates across 32 countries. It offers car purchase and leasing, in-vehicle payments, fueling and EV charging and subscription services such as insurance and in-vehicle entertainment.
JPMorgan said it plans to invest in and rebrand the payments business and expand its mobility-focused payments to other industries.
"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.
Non-finance companies, including car manufacturers, have stepped up expansion into financial services in recent years.
Volkswagen's financial services division will retain a 25 percent stake in the payments business, JPMorgan said. The deal is expected to close in the first half of 2022.
Volkswagen Group did not provide a breakdown of earnings for the payments business in its half-year results in July, but said sales at its financial services arm were 22.6 billion euros ($26.77 billion), up 18 percent on the prior year.