J.P. Morgan announces that it has entered into a strategic deal with Volkswagen Financial Services, with plans to acquire a controlling interest of close to 75% in the car manufacturer’s payments platform, operated by Volkswagen Payments S.A., subject to regulatory approvals.

The deal will expand the bank’s digital payment capabilities and see the platform extended and accessible to the broader auto industry for the first time. Over time, the alliance between the two firms will seek to develop the platform for new markets and industries outside of the automotive sector where mobility-focused payments will become central. Volkswagen Financial Services will remain a shareholder and the platform will continue to facilitate payments across the Volkswagen network in support of all Volkswagen Group brands globally.

Founded in 2017 in Luxembourg, Volkswagen Payments S.A. operates a leading payments platform designed for the auto industry. Operating in 32 markets around the world, the business offers a range of digital payments services across the auto ecosystem including: initial purchase and leasing, in-vehicle payments, fuelling and electric vehicle charging, parking and subscription-based services such as insurance and in-vehicle entertainment. It focuses on digitally connecting the auto ecosystem and improving the payments experience for consumers, distributors and suppliers alike.

The platform is a natural fit for J.P. Morgan’s Wholesale Payments business – which combines corporate treasury services, trade finance, card and merchant services capabilities – and delivers an integrated payments experience to end users across the economy. Volkswagen Payments S.A. will continue to be based in Luxembourg, also one of J.P. Morgan’s key European locations and where it has a proud history of supporting clients for more than 45 years.

The deal comes at a time when customers expect a seamless digital payments experience, regardless of industry or sector. The auto industry is increasingly focused on this area and there is significant opportunity for global growth, with in-car payments alone predicted to reach $4bn in 2021. J.P. Morgan expects that the connected vehicle, the digital payments experience and customized payment services, will all become core features of business models in the future.