Vantiv is a top dog in the business of payment processing, boasting 19 percent market share based on purchase volume. It is second only to First Data, which has 20 percent market share.
But Vantiv is totally U.S.-based, whereas Worldpay is an international merchant acquirer, processing digital and in-store payments in 146 countries. Its business is concentrated most in the United Kingdom, where it processes 41 percent of all credit card transactions.
Though Vantiv’s stock initially dipped on news of the merger, it later pared its losses as investors realized that the combination could be great for business.
“Why? For starters, Vantiv is about to go from a domestic payments play to a worldwide titan overnight,” Cramer said. “Thanks to the Worldpay acquisition they’re going to get a huge international footprint, especially in Europe.”
With European economies picking up and the European Union issuing a new directive to help expand the payments system, Cramer said this merger is good news for Vantiv.
Being an international player, Worldpay will also help Vantiv out of the rut that big-box U.S. retailers are in because of e-commerce giants like Amazon. The weakness reflected on Vantiv’s earnings, but with Worldpay, the company will diversify.
Worldpay also has a broader digital presence than Vantiv, with 34 percent of its business online as opposed to Vantiv’s 10 to 15 percent.
“This is huge because Vantiv has tons of big retailers as clients who are looking for global e-commerce capabilities. By acquiring Worldpay, that’s exactly what Vantiv will be able to give them,” the “Mad Money” host said.