Hardware tokens, or “dongles” are small electronic devices that are able to generate passwords that change over time; the password generated will only work at the time of generation, so will become useless if passed on to a potential fraudster. Only by using the token device will a valid password be generated.

Tokens have been used for many years to provide authentication and access for corporate networks, where there are a small number of users accessing very secure and sensitive networks. However, interest has recently revived in them, with Lloyd's Bank conducting trials of the devices for its online banking customers.