PayPal announced last week that it will soon support a key fob to provide its customers with two-factor authentication. Costing $5 for personal accounts--and free for business accounts--people can get a One-Time Password (OTP) device that displays a new six-digit code every 30 seconds. The intent is to provide customers with another line of defense against identity theft and the continuous onslaught of PayPal-based phishing attacks.

On the plus side, it's nice to see PayPal being aggressive with security. If people feel they can't trust PayPal, the financing company suffers. A big PayPal breach could also be the only thing that has the potential to crash the eBay party. If PayPal can't be trusted, the natural question consumers will ask is: What about eBay? A security breach at a brick-and-mortar business is bad. A security breach at an e-business can be lethal. Now kudos to PayPal aside, I see a potential problem in the not-too-distant future. Pretty soon, we consumers will be required to have multiple security tokens, smart cards and passwords to do anything online. Imagine a string of security fobs you carry around next to the keys to your minivan and SUV. This could get out of hand rather quickly.