The PayPal Security Key is actually a small electronic device, designed to clip on to a keychain, that calculates a new numeric password every 30 seconds. PayPal users who sign up to use the device will need to enter their regular passwords as well as the number displayed on the key whenever they log in to the online payment service.
"The key is really going to give users one more layer of security for their accounts," said Sara Bettencourt, a PayPal spokeswoman.
Because the numeric password changes so frequently, even successful phishers will end up with obsolete numeric passwords and will be unable to empty PayPal accounts.
"If you fall for a phishing scam and give away your user name and password ... if you used the PayPal Security Key, a third party couldn't get to your account because they wouldn't have this dynamic digit," Bettencourt said.