One-Time Passwords. The one-time password was designed to overcome the aforementioned problems. Under this approach, the user’s password changes continuously. This technology employs a credit card-sized smart card that contains a microprocessor programmed with an algorithm that generate, and electronically displays, a new and unique password every 60 seconds. The card works in conjunction with special authentication software located on a mainframe or network server computer. Each user’s card is synchronized to the authentication software, so that any point in time both the smart card and the network software are generating the same password for the same user.
To access the network, the user enters the PIN follower by the current password displayed on the card. The password can be used one time only. If for example, a computer hacker intercepts the password and PIN during transmission and attempts to use them within the 1 minute time frame, access will be denied. Also if the smart card should fall into the hands of a computer criminal, access cannot be achieved without the PIN.