Mobiles set for key role in card authentication
Two factor authentication devices may include the mobile phone
Mobile phones could be used to authenticate financial transactions in the UK, says the head of financial crime at Lloyds TSB.
South Africa’s First National Bank and two banks in New Zealand are already using SMS to deliver authentication codes, but Lloyds TSB’s Ken Farrow says the phone is set to become the actual card-reading device.
He believes mobiles are perfectly suited for two-factor authentication because people carry the devices with them all the time.
‘It’s not inconceivable that a mobile phone could have a chip-enabled slot in which you insert your card,’ said Farrow.
‘One or two financial services firms have been saying that is probably the way it might finish up, or possibly a very slim card-reader attachment that you plug in to the phone.’
While development of two-factor phones has not yet started, UK payments industry association Apacs has held discussions with mobile phone companies.
Richard Martin of Apacs believes phones will be used to authenticate transactions, but contactless technology is more viable.
‘An open slot would weaken the structure of the phone and make it bulkier,’ he said.
‘A number of credit card issuers are looking at building contactless technology onto their cards.’
Contactless technology would remove the need for a slot and allow the phone and card to communicate provided they are within two centimetres of each other.
Tim Pickard, marketing director at RSA Security, thinks mobile phone card readers make sense from a convenience point of view, but advocates standardisation so that all cards can be read.
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