JPMorgan drives into new payment space
JPMorgan’s move into the in-vehicle payments market reflects the ever-growing impact of financial technology on the automotive industry.
As anyone who has tried to buy a new car recently will have discovered, the availability of new vehicles has been seriously hit by a shortage of semiconductors. However, such issues have done little to dampen expectations for growth in the in-vehicle payments market.
According to a global study of connected vehicle payments by Ptolemus Consulting Group, 600 million vehicles will generate in-car transactions worth more than $500 billion by 2030. And in 2019, nearly 30% of respondents to the Pymnts and P97 Networks’ Digital Drive report said they would make purchases online during an autonomous vehicle commute.
Perhaps it should not be surprising, therefore, that in September, JPMorgan’s wholesale payments business announced plans to acquire a controlling interest in the Volkswagen payment platform. The bank’s acquisition of Volkswagen Payments is a continuation of a strategy to provide vertical-specific solutions that saw the purchase of medical payments technology firm InstaMed in 2019.
“Volkswagen has developed a connected car solution that allows car owners to use their vehicle as a wallet to pay for a variety of associated services,” says Max Neukirchen, chief executive of merchant services at JPMorgan Chase.