On 28 Sep, 17:33, The Natural Philosopher
wrote:
Dave wrote:
I am banking with Nat West and went for paperless banking some time ago
and they gave me a card reader for some of the transactions. What does
it do?

Dave

it generates a one time password based on your card number and pin, and,
I assume, the time of day and date.

so you key your PIN into it, and an 8 digit number comes up. That's your
one time password. Valid for however long.

means if someone has compromised the computer and is reading your
keystrokes, it wont work for them next time.

Almost but not quite right. It's a challenge/response type system. The
website produces the challenge which you type into the card read, you
type the response back into the web page.
Otherwise known as two factor authentication. Something you have (a
Debit Card) and something you know (the PIN)