Yahoo Inc. has formed a strategic relationship with London-based financial institution HSBC Holdings PLC to offer a co-branded person-to-person payment service worldwide later this year.
The service, called Yahoo PayDirect with HSBC, will be marketed with both online and offline campaigns to Yahoo's 200 million customers and HSBC's 28 million customers.
Through the agreement with HSBC, customers can send and receive money via e-mail by linking their credit card, debit card or bank accounts with their Yahoo PayDirect with HSBC account. The service allows users to pay electronically for online shopping and auction services, send money anywhere in the world and collect contributions for charity events.
Yahoo said the service will be available in the United States later this year and worldwide in 2002.
The company already has a PayDirect service, which has been in place for about a year. Existing customers can use their old PayDirect accounts along with the new service with HSBC. Yahoo also said it hopes to make the technology behind the service available directly to companies to facilitate e-commerce and person-to-person payments.
“By combining both our brands, we hope to remove some of the barriers to e-commerce payments, especially outside the U.S.,” said Jasmine Kim, Yahoo's vice president of international marketing.
She noted that outside the United States, credit card penetration is less than 10 percent in most countries and person-to-person payments are preferred. The Yahoo PayDirect with HSBC service, she said, is expected to be more popular in Europe and elsewhere than in the United States.
“This is a way to break down the barriers and encourage people to do more online transactions,” she said.