JPMorgan said on Wednesday that it intends to purchase a near-75 percent interest in Volkswagen's payments division.
The agreement will allow the US banking behemoth to extend its digital payment capabilities and make its first foray into the automobile industry.
According to JPMorgan, the two firms intend to expand Volkswagen's platform outside the automotive sector over time.
In a statement, Shahrokh Moinian, EMEA head of wholesale payments at JPMorgan, said, "We plan to build on Volkswagen Financial Services' innovative groundwork on the existing platform and apply the global scale of our payments expertise to meet evolving customer expectations in the auto space and beyond."
The deal's financial specifics were not disclosed.
Volkswagen has been making inroads into the digital payment sector for quite some time. In 2017, the firm's payments division was formed in Luxembourg. Customers may use its platform to buy and lease vehicles, as well as pay for parking fees and electric vehicle charging.
The announcement did nothing to help Volkswagen's stock, which was down more than 2% on Wednesday amid a widespread sell-off in European markets.
JPMorgan's wholesale payments unit will take over the payment section of the German carmaker. In the first half of 2022, the deal is scheduled to be completed. Following the deal's conclusion, JPMorgan suggested that the two businesses may modify the venture's moniker.
JPMorgan has made a slew of acquisitions and investments so far this year. In June, the firm agreed to purchase Nutmeg, a British online wealth manager, and OpenInvest, a San Francisco-based platform focusing on ethical investing.
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