Price reductions could help spark demand for cards that display one-time passcodes consumers may use to secure online-banking and retail transactions, according to some observers. Consumers in various countries already use readers plugged into personal computers, passwords and challenge-response questions to authenticate themselves when using online-banking and merchant sites. Companies such as Los Angeles-based Innovative Card Technologies Inc. hope the increasing use of Web sites for transactions, combined with increasing awareness of fraud, persuade more consumers to use cards that display passcodes based on algorithms unique to each cardholder. Consumers type in the passcodes when prompted by Web sites for authentication. Innovative has shipped at least 500,000 such cards, Richard Nathan, the company’s president and CEO, tells PaymentsSource. Still, the market remains relatively small. “The reason the market is what it is is because of the price barrier,” he says. For instance, Bank of America Corp. charges consumers a one-time fee of $19.99 for its SafePass card, which displays a six-digit passcode, according to the financial institution’s Web site. Low demand for the devices has kept prices high, says Thomas Flynn, director of marketing for identity and access management for France-based smart card vendor Gemalto NV. Flynn says one-time passcode cards cost between $10 and $20, though he would not be more specific. Dennis Brestovansky, president and CEO of Minneapolis-based Aveso Inc., which makes modules for one-time passcode cards, tells PaymentsSource bringing the cost of such a card down to $5 would help increase demand. Aveso hopes to “be close” to that target by late 2010, he says.

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