Credit Card with One-Time Password Generator
This is a nifty little device: a credit card with an onboard one-time password generator. The idea is that the user enters his PIN every time he makes an online purchase, and enters the one-time code on the screen into the webform. The article doesn't say if the code is time-based or just sequence-based, but in either case the credit card company will be able to verify it remotely.
The idea is that this cuts down on card-not-present credit card fraud.
The efficacy of this countermeasure depends a lot on how much these new credit cards cost versus the amount of this type of fraud that happens, but in general it seems like a really good idea. Certainly better than that three-digit code printed on the back of cards these days.
According to the article, Visa will be testing this card in 2009 in the UK.
EDITED TO ADD (12/6): Several commenters point out that banks in the Netherlands have had a similar system for years.
Posted on December 4, 2008 at 6:17 AM • 71 Comments