Volkswagen recently arranged an acquisition of a Vancouver-based mobile payments company PayByPhone, the two firms confirmed to The Wall Street Journal on Tuesday. The transaction will officially take place at some point in 2017, following all necessary regulatory approvals, but neither company disclosed any financial details of the deal. PayByPhone primarily provides mobile payments services for parking spaces in the United States, United Kingdom, Canada, and France. The company recently claimed it handles approximately $300 million in parking charges on a yearly basis. However, industry experts argue that Volkswagen’s latest acquisition is more than just an attempt to start a parking business.
Seeing how Volkswagen recently invested in numerous car-sharing, ride-hailing, and similar services across the world, there’s a good chance that the company is looking to integrate PayByPhone’s existing technology with some of its upcoming ventures. As the German automaker is delving deeper into connected cars services, it has an increasing need to unify its new business endeavors with a universal solution for conducting mobile payments. In that context, the acquisition of PayByPhone makes perfect sense seeing how the Vancouver-based company has been perfecting its payments service for the last 16 years.
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Industry experts speculate that Volkswagen is trying to diversify its portfolio primarily because numerous tech companies all around the world are currently in the process of developing autonomous and connected cars, which is why the German auto giant wants to mimic these investments before falling behind industry trends. Furthermore, it’s estimated that selling access to car owners is significantly more profitable than selling actual cars, so connected cars technologies could potentially become a massive revenue stream for Volkswagen in the future. Some of the company’s latest investments in this field include $300 million given to an Isreali ride-hailing service Gett and $28 million invested in a mobile car rental platform Silvercar. Finally, the German automaker also recently established Moia, a Berlin-based subsidiary currently working on numerous ride-hailing, car-sharing, and related services. In other words, Volkswagen is seemingly rather serious about diversifying its revenue stream by investing in connected cars systems and other new technologies, so the company is likely to announce more similar ventures shortly.