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America's biggest bank now owns the keys to its very own Volkswagen...payment software.

JPMorgan Chase announced Wednesday it is buying a 75% majority stake in Volkswagen Payments, extending an acquisition spree designed to stem the pains of low interest rates on its core business.

A Wallet for a Car

The VW acquisition is the bank's latest — and most ambitious — step into the auto sector. JPMorgan already has financing partnerships with Jaguar Land Rover and Subaru, but VW Payments is a more ambitious dice roll.

VW's unit, which JPMorgan plans to rebrand, lets drivers pay for parking, fuel, electric-vehicle charging, insurance, and in-car entertainment right from the driver's seat with in-vehicle payments. Already up and running in 32 countries, the service essentially turns a car into a digital wallet that can transact at thousands of gas and charging stations.

And JPMorgan plans to expand the use of the software beyond auto-related purchases, as well as opening it up to other car brands to capitalize on an emerging sector:

  • According to research group Grand View, the in-vehicle payment market will reach $4 billion in 2021.
  • VW doesn't separate earnings for its payments unit, but mid-year statements in July said sales at the automaker's financial services division were $27 billion, an 18% increase from 2020.

Dimon Deals: The transaction syncs perfectly with JPMorgan's current business strategy. As record-low interest rates dealt a blow to its core banking services — net interest income was down 8% year-over-year in the second quarter — longtime CEO Jamie Dimon has responded with a tried and true strategy: diversify.

The bank has already matched last year's deal volume with at least 34 acquisitions thus far in 2021. Purchases include California-based ethical investments platform OpenInvest, British digital wealth manager Nutmeg, and forest management company Campbell Global.