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Innovations and Payment Systems

One-time password deal announced

Summary

Deal announced on one-time passwords that boost credit card security.

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VeriSign and Innovative Card Technologies announced a deal on May 1, 2007, to market technology that allows for one-time passwords on credit cards.  The companies plan to jointly sell this concept to credit card and debit card issuers.

Compare Low Interest Credit CardsAccording to VeriSign, one-time passwords have not become commonplace in the U.S. in part because they require consumers to carry a small device that generates passwords.  But by building the technology into the cards consumers already carry, VeriSign believes that barrier is removed.

The companies stated that the technology would be featured on the corner of a credit card or ATM card.  Consumers would use the one-time generated six-digit code shown on the card’s display window, along with a user name and password, when accessing their online bank account.

Security firms like VeriSign have been promoting one-time passwords and other “two-factor” authentication systems as a method for preventing identity theft techniques such as phishing that trick consumers into revealing passwords or other sensitive data.

The new technology would keep a user safe even if their regular password was compromised.  Since the code constantly changes, anyone trying to access the account would need to have the credit card physically in their possession.  And, even if the card was lost, the consumer would still be protected since a user name and password would still be required for access.

VeriSign reported that it expects to announce the use of its cards by a major bank shortly.  The price for banks would range from $10 to $30 per card, depending on the volume purchased, with VeriSign indicating that major banks would probably pay a dollar amount in the teens for the new technology, based on projected volumes.

Since traditional credit cards cost less than a dollar, banks would likely have the choice of passing on all of the card costs to consumers, some of the costs, or paying the entire cost themselves and using the cards as a marketing advantage for security-conscious consumers.

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