German auto giant Volkswagen is reportedly in talks with the leading US bank JPMorgan to sell off its digital payments system. The details of the deal are yet to be made publically available. Reuters first broke the news on JPMorgan and Volkswagen Payments deal here.
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What is Volkswagen Payments?
Founded in 2017, Volkswagen Payments is one of the largest Electronic Money Institution (EMI) in Europe. The Strassen/Luxembourg-based fintech company operates independently as a subsidiary of Volkswagen Financial Services AG. Currently, Volkswagen Payments provides contactless payments solutions to various VW brands and partners, and are managed entirely within the frameworks of the larger Volkswagen Financial Services.
What does the deal mean for Volkswagen Payments?
VW’s fintech vision has been very clear and programmed to make digital payments a part of holistic mobility solutions, not just in Europe but also around the world. By selling off to JPMorgan, VW Payments could find solid footing and garner pace to expand on its ROUTE2025 mission, which largely revolves around making VW a world-class automotive financial services company, Given the recent investments in the global fintech market, and the rise of crypto-based payments systems, Volkswagen Payments might play an active part in shaping the future of Fintech with Mobility solutions, delivered with an established financial services company like JPMorgan.
In short, this deal gives rightful legitimacy to the fintech solutions that VW Payments has been developing for the past 4 years or so.
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By acquiring Volkwagen Payments, JPMorgan would elevate to a leadership position in the European fintech market, providing digital payments solutions to VW customers for contactless transactions. These activities would enable contactless payments for parking, car-pooling, electrical charging, fuelling, tolls and insurance. As per VW, this cutting-edge fintech product could be made available to all the next-gen connected vehicles that come out of the Volkswagen stable. From online shopping to making emergency calls, VW is slated to advance into the next-gen of IoT-based connected driving experiences that tie in safety, in-car entertainment, telemetry, and fintech. By selling off its fintech arm to JPMorgan, the automaker might be able to focus on other areas of the digital ecosystem that require innovation and development expertise.
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