Home hand held device to combat online fraud

Up to six million customers at most of the UK’s big banks will be receiving their very own chip and pin machines to help secure their online transactions.

Responding to increasing online fraud, the nation’s largest banks, with the exception of HSBC, are issuing online banking customers with devices which will provide an extra level of security.

Barclays, NatWest and Nationwide will send out hand held calculator style card readers while Lloyds TSB will issue a keyring with an inbuilt chip.

All these devices will generate random numbers which the user will have to enter alongside bank details when they use online banking in an attempt to counter fraud which uses "key logging" software to record a user’s keystrokes.

The trial could be extended to retail transactions if it proves effective.

According to the Association of Payment Clearing Services, online fraud is one of the few growing types of card fraud, with a rise of 44 per cent last year to £33.5 million.