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This is a technology designed to add a further layer to the normal User Name and Password based form of user authentication. It is based on the principal that you must both know something, i.e. your user name and password and also have something physical.
This can be either
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A. A key ring sized “Token” which gives you a different unique PIN number which you must type in every time you logon. This is security keyed to the server and there are billions of combinations.
Or
B. A Smart Card which must be inserted into a reader attached to the PC. Again this provides ID unique to that particular user.
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