Visa Token Based Authentication piloted

The new Visa Token Based Authentication scheme is to be piloted by Britain's high street banks.

It is designed to protect customers from fraud when purchasing goods via the internet or telephone.

Customers will be asked to slot their card into a small plastic device, which will generate a random four-digit number.

Retailers will then ask for this number, which is authenticated when the device connects to the bank to verify the digits.

The news comes following the latest figures from Apacs, which said that £150 million was lost last year to fraudulent transactions where the cardholder was not present.

Visa has said that the plastic device is small enough to be placed on a keyring, making it convenient for customers to carry around.