With Chip and PIN widely predicted to encourage fraud migration to online retailing and other ‘cardholder not present’ operations, banks are investigating new technology options to provide a secure alternative.

Favourite is the sort of PIN-enabled technology with which customers will become familiar over the next couple of years.

Consult Hyperion, a leading IT consultancy specialising in payment solutions, is working with APACS on a ‘disconnected authentication’ model, which uses the sort of pocket-sized password generator familiar in Internet security systems.

Shoppers simply slide their Chip and PIN enabled payment card into a slot on the device and are then asked to enter their PIN. The unit then authenticates the PIN and will generate a one-time numeric code that the user can then enter on a Web site, where they enter a credit card number at present.

‘With some potential users we’re developing systems which will produce an authentication code in the same sort of numeric format as a credit card with groups of four numbers,’ says ID’s business development manager David Fildes.