VeriSign has announced plans to integrate two-factor authentication technology into ATM and credit cards, a move that would give customers significantly more protection against scammers without requiring them to go through the hassle or expense of using a stand-alone security token.

The move will allow debit and credit cards to include a small panel that displays a temporary password that regularly changes every 60 seconds or so. Customers logging on to the issuer's website would be required to enter both the temporary and permanent password, a measure that would provide more protection against phishers and other online miscreants. Currently, most financial institutions rely on a single password to authenticate customers.

Criminals employ an impressive arsenal of tricks to intercept online passwords, with phishing emails and keyloggers being among the most popular. Relying on a static password as a sole means of authentication makes it easier for criminals to repeatedly and surreptitiously gain access to a victim's account, often over an extended period of time.

Requiring two-factor authentication, which requires both a static password and the temporary code, can limit this damage, since a criminal would need both physical access to the card and the knowledge of the permanent password to access the account. (The added protection, however, is not immune (http://www.theregister.co.uk/2006/07/13/2-factor_phishing_attack/) to attacks.)

Given the seemingly daily reports of fraud on eBay and other online commerce sites, it's hard to understand why two-factor authentication isn't already common place.

VeriSign isn't saying what financial institutions will adopt the service, but a spokesman said several banks have already signed up and that VeriSign plans to announce them in the near future. Participating financial institutions will be able to share codes so customers won't have to carry multiple cards. VeriSign is teaming with Innovative Card Technologies to deliver the service.

VeriSign's press release can be found here (http://www.verisign.com/press_releases/pr/page_042055.html). ®

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