JPMorgan Chase & Co has decided to phase out the payments platform it purchased from Volkswagen four years ago, following executives’ determination that it would not achieve profitability, reported Bloomberg, citing sources.
The service, referred to as the Mobility Payments Solution within JPMorgan and known as VW Pay, delivers payment technology in the mobility space.
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While the bank will exit operation of this particular platform, it intends to keep offering mobility-related services to its clients, according to an individual familiar with the matter.
A JPMorgan spokesperson did not respond to requests for comment, the media outlet reported.
In 2017, Volkswagen launched its original payments venture, and by the time JPMorgan acquired a majority stake in the business, it had expanded operations into 32 nations.
The platform provides option to customers on digital payments for automotive purchases, fuel, parking and other connected services.
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By GlobalDataAt the time of the deal, JPMorgan outlined ambitions to work with Volkswagen on expanding the platform’s reach into new markets by utilising internet-enabled vehicles as a method to pay.
A source said that employees were notified of the decision in recent weeks, and wind-down procedures are set to take place in the coming months.
Staff at offices in Luxembourg and Munich will be affected; some may be offered positions elsewhere within JPMorgan, while others could face job losses, according to the report.
According to the employment union Aleba, 33 positions will be eliminated in Luxembourg following the shutdown of the payments subsidiary there.
Aleba has indicated that the initial redundancies are anticipated to take place in 2026 onwards.
This decision follows earlier actions by JPMorgan to exit digital ventures that did not meet commercial goals.
In 2019, the company revealed plans to discontinue its Chase Pay app, a digital wallet.
According to Bloomberg report, by the time JPMorgan chose to phase out the service, less than 1% of merchants had adopted the wallet for transactions.
