HSBC Bank has gone into partnership with Yahoo! to provide an online facility to make payments over the internet. The project allows customers to have online accounts, thus eliminating transaction costs and the need for credit cards.
HSBC instructed Allen & Overy which has advised the bank on a fair amount of internet-related transactions, as well as banking deals. Last year, it advised the bank when it set up its website,
Because this project allows customers to set up an online account for the first time, the regulatory aspects of the deal were particularly complicated. The regulators were concerned about money laundering, fraud and book keeping.
Lead partner on the deal Simon Gleeson said that because in the online environment banks do not get to know their clients, regulators saw a flashing amber light.