PayPal Deepens Its UK Foothold with a Football Deal

PayPal secures football contract

PayPal (PYPL) recently announced winning a four-year contract to handle digital payments for grassroots football teams in the United Kingdom that are members of the FA (Football Association). There are over a million FA grassroots football players across the United Kingdom. In this contract, PayPal’s technology is set to allow players to pay their match fees (subscription payments to their clubs) using smartphones instead of cash or checks.

The cash payment method that has been in use over the years has recently become inefficient, with clubs reporting challenges such as late or missing payments that hamper their operations. As CNBC reported last year, PayPal views cash as the greatest threat to its business, so this FA deal presents it with an opportunity to downgrade that threat. PayPal hinted that there is an opportunity for its FA contract to expand beyond handling match fee payments.

PayPal Deepens Its UK Foothold with a Football Deal

PayPal’s international revenue rose 20%

PayPal has over 24 million UK customers. The UK market falls under PayPal’s international segment, where revenue rose 20% year-over-year to over $2.0 billion in the fourth quarter. While international operations contributed 48% of PayPal’s total revenue in the quarter, they contributed more than half of Google parent Alphabet’s (GOOGL) and Facebook’s (FB) revenue. About a third of Amazon’s (AMZN) retail revenue came from international operations. Square (SQ) operates in four international markets, including the United Kingdom, but doesn’t break down its revenue by geography.