Dual form factor authentication has been used for a long time to add an additional layer of security both online and in the real world. Dual factor authentication requires a user to offer some sort of physical token along with something they know such as a password to access systems secured using the technique. Technology giant IBM has announced a new dual factor authentication system that is NFC-based and intended to help users keep online accounts and services secure.
IBM's dual factor authentication system uses two steps with the first including a standard username and password the user would type into a web browser or application just as they do now. The second step in IBM's proposed system would be in the form of an NFC enabled card. IBM believes that this sort of card will be issued by a bank and would be unique to each user.
Some current dual form factor authentication systems for online access use the smartphone itself as the second layer of authentication. However, IBM contends that since many services are accessed from a mobile device and mobile device theft is so common that the smartphone itself is no longer acceptable as a second form of authentication in a dual form factor system.
IBM foresees users taking advantage of these NFC equipped cards by tapping the NFC enabled card against their device to calculate a key to send that information to the bank for verification. If the wrong card is used or if the card isn't present, any online transactions or logins would fail. The problem with implementing a system like this right now is that NFC technology isn't available in the iPhone, which is still one of the most popular smartphones on the market. Granted, accessory cases could be available to add NFC technology to the iPhone and future versions may have the tech baked in.
SOURCE: Android Community