PayPal has introduced a
security key that members can get for only $5. Unfortunately, it is only available in the US, Germany, and Australia. I guess those of us in other countries don't have security problems. Actually, they do say that it will be available in other countries later. They are still testing it to see if it is worthwhile. They would not have to reduce fraud very much to pay for it, though, PayPal fraud is currently over
$35 million a year! (This is actually a very small percentage, so don't worry too much.) The key can also be used to log into eBay.
What the key does is provide a constantly changing number that you type in after your password. This number uses strong encryption and a good clock to prove that you have the key. This provides two factor authentication - something you know, your password, and something you have, the security key. Even if someone gets your password and the number on the key it is only good for a couple of minutes.
I eagerly await this to be offered to Canadian customers. Now, if PayPal were to provide an
OpenID service life would really be good!