The payment system will transform how universities send money to athletes.

In a major shift for college sports payments, online payment services company PayPal said Thursday it's partnering with two major college athletic conferences to help distribute money directly to student athletes.

The multi-year agreements with the Big Ten and Big 12 Conferences will create a new system for paying college athletes through PayPal and its sister service Venmo, following a recent federal court decision that allows universities to share revenue directly with players, PayPal said in a release.

The new system will launch this summer, the company said, letting universities send payments straight to athletes' PayPal or Venmo accounts. This marks a significant shift from the current system of NIL (Name, Image, and Likeness) deals, which often involve third-party collectives managing payments to players.

"Venmo is ubiquitous on college campuses. There's 19 million college students, and over half have a Venmo account," PayPal CEO Alex Chriss told ABC News on Thursday. "This is the natural landing place for these revenue shares."

Big 12 Commissioner Brett Yormark emphasized the importance of having a reliable payment system.

"Starting July 1, we can pay student athletes directly from our institutions," Yormark told ABC News. "We need a reliable, very secure payment platform in which we could distribute money to our student athletes."

The companies said the partnership goes beyond just payments.

Venmo's release noted that it will become deeply involved in college sports, serving as the presenting partner for the first-ever Big Ten Rivalry Series and partnering with the Big 12 Conference across football, basketball and Olympic sports championships.

Addressing concerns about young athletes handling large sums of money, Yormark revealed plans for financial education.

"We are going to engage with a very meaningful financial literacy program with Alex and his team," he said. "Educating student athletes on their finances is critically important and will be at the core of this partnership."

The system is designed to protect athletes, Chriss noted.

"The money goes directly to the athlete's wallets, to their Venmo account," he said. "There's no intermediary, there's no one else getting the money first."

According to the announcement, the initiative will expand beyond athletics. PayPal will become a preferred payment partner for tuition at select schools, and Venmo will enable payments for campus expenses like bookstore purchases, event tickets and concessions. The company said the full program is expected to roll out during the 2025-2026 school year.