Six months after Britain introduced new credit and debit cards, increasing theft via the Internet has caused banks and retailers to consider new technology.

The chip cards -- cards which use chip technology instead of slide recognition -- and PIN cards -- which require personal identification numbers -- are now mandatory for new cards in Britain.

The Sunday Observer reported perpetrators increasingly have been focusing their efforts on card-not-present, or CNP, fraud, which can be done by phone, Internet and mail.

The Association of Payment Clearing Services said CNP fraud soared 21 percent last year and has continued to rise in the first half of 2006. Also, the Observer reported that perpetrators are increasingly defrauding British cardholders overseas.

In order to combat the growing rate of fraud, early next year a number of banks will start issuing customers hand-held devices for use online. The devices will electronically generate a one-off password. This password will be used in addition to the usual security checks carried out by banks and retailers online.

The device will be built to an industry standard so cardholders will be able to use it at any bank.