I commented on the key fob security key on an old blog around 2 years ago. FINALLY paypal have deemed the UK worthy of this security feature.
This technique is used in the UK by many larger banks that provide on-line banking for their business customers. This could well be the end of phishing for paypal users as even if you enter your username and password, they would need to physically come round and steal your security key to generate the number! This is a great new move for security from our friends at paypal and maybe eBay will adopt a similar system to protect its buyer and sellers from phishing. I would certainly pay £3 as it will probably be in the UK for that extra added security and peace of mind.
Tamebay had the heads up on this matter, which will greatly increase the security of paypal.
Check this old post from the CA blog.
