Yahoo launches Western Union-style service

Internet giant Yahoo yesterday launched an online payment service allowing users to send money to family and friends in 182 countries, even if they have no bank accounts or internet access.

The service, called Yahoo PayDirect International, puts Yahoo head-to-head with money transfer firms like Western Union.

The new service will allow users to obtain cash through some 800,000 automatic teller machines (ATMs) around the world through the Cirrus network.

After a sender makes an initial payment a PayDirect card is sent to the recipient to allow withdrawal in local currency.

Instead of using the card recipients can also collect funds at any of the 60,000 MoneyGram international money transfer locations worldwide.

Among Yahoo's partners are HSBC Bank, courier service DHL and electronic payments group eFunds.