A security startup is about to pilot-test its new browser plug-in technology that protects users from man-in-the-middle and man-in-the-browser attacks as well as from phishing and pharming, Dark Reading has learned.

KeyID , which recently emerged from stealth mode, is currently talking to major banks about testing its so-called SecureOTP technology, which adds a second layer of authentication to existing two-factor authentication methods using one-time passwords (OTPs).

“SecureOTP is an easy-to-deploy solution that works with any OTP device and solves the major challenges to this technology like man-in-the-middle and man-in-the-browser attacks,” says Sunil Ippagunta, president and CEO of KeyID and inventor of the technology. “[It] essentially leverages the existing investment in OTP technology. It can even work with OTP sent to mobile phones.”

KeyID’s patent-pending SecureOTP technology basically adds its own layer of authentication to a bank or organization’s one-time password technology by encapsulating the OTP with the SSL channel. It works at the authentication stage of a transaction, providing a separate, encryption packed with the OTP so an attacker that tries to intercept the transmission cannot read the password information.

“The problem with man-in-the-middle is that there could be two separate SSL channels, one from the customer to the man-in-the-middle and another from the man-in-the-middle to the real server,” Ippagunta says. “SecureOTP ensures that there is no one in the middle between the customer and the real server. Once an SSL channel is established between customer and server, no one else can join.”

There is a “remote” chance for a man-in-the-browser attack even after secure authentication is set up, however, he says. But the attacker wouldn’t be able to read the SecureOTP-secured credentials. “The credentials are only valid for a specific session and channel,” he says, which would stop the attack.

Ippagunta says most security technologies in this space target phishing and pharming, but don’t solve the MITM and MITB attack problems. “The OTP [alone] can solve phishing to some extent, but does not provide any protection against MITM or MITB. Companies resort to various kinds of fraud monitoring services to overcome these problems. These are expensive and never reliable -- there are more false alerts, and a real hacker can always overcome these hurdles.”

Gail Kerr, executive vice president of business development for KeyID, says the company has spread the word on its new technology to PayPal, Bank of America, and CitiBank. Overall, the banks seem interested in SecureOTP, in part because it’s user-friendly. “They are having to add a lot of customer service people to coach customers on how to use other security solutions,” Kerr says.

KeyID plans to begin its pilot tests in the first quarter of next year, and then roll out the product in the second quarter. SecureOTP will be priced under $2 per user for large installations, Ippagunta says. The company also offers SecureCard, another browser plug-in that works with smart cards and adds data encryption, identity verification, and transaction authorization, according to the Wilton, Conn.-based company.

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