PayPal is preparing to offer security key fobs to users in a bid to strangle the growing number of phishing scams centring around the service.
The key fobs, which will be offered to regular users for $5 and business users for free, will display a six-digit code which changes every 30 seconds. When carrying out transactions via PayPal, users who opt into the key fob scheme will have to enter the current six-digit code in order to log into their accounts.
PayPal is calling this new security system 'two-factor authentication'. The dual-layered security system allows users to ensure their accounts are protected, even if their passwords are compromised.
PayPal is a subsidiary of eBay , and is used in most transactions which take place on the site. The anti-phishing blacklist put together by Google, shows that over 50 per cent of phishing schemes target eBay and PayPal customers. So it's clear that something like this needed to be done to protect unwary eBay customers.
The new key fob scheme is not guaranteed to be scam-proof though. Tech-savvy phishermen have targeted similar keyfob security systems in the past by setting up phishing sites which request users' log-in details and keyfob codes, whilst simultaneously using those details to log into the real sites.