That said, PayPal will be paying attention to the number of users who adopt the password token and to the company's rate of fraud in an effort to figure out whether the tokens are worth the cost of the program, he said.
Currently, fraudulent transactions amount to around $35.2 million dollars a year, or one third of one percent of PayPal's total global payment volume of $11 billion, Barrett said. Lowering that fraud rate even a little could offset the cost of the program.
PayPal is also taking cues from other online financial services firms like eTrade, which launched a program in 2005 to allow all its U.S. account holders to use an RSA SecurID token for two-factor authentication, Barrett said.
"eTrade has been pretty bullish about this," he said. "One thing that they noticed is that the customers who have (the token) use their account more because they feel safer," he said.
Even before the news was announced, PayPal and VeriSign were promoting the new program on the floor of eBay Live at the Boston Convention Center, and VeriSign employees were handing out free PayPal tokens to attendees and signing them up for the new program.
Charles Hu, an eBay Live attendee who sells concert tickets under the name "SummerComets" on the online auction Web site, said that he liked the idea of having an additional layer of security for his eBay account.
"I'm always worried that someone will steal my password," Hu said. "I've seen (the password tokens) used in other industries, too."
However, Hu wasn't ready to sign up for the program because he was worried that doing so would lock his wife out of their eBay account.
"She's back at the hotel, so if I sign up now and they change our account, she's not going to be able to log in," he said.
Barrett said that PayPal was prepared for the increased support calls that will come after the secure tokens are in widespread use but says that his company has a duty to protect customers from scams, even if it adds to the cost of doing business for PayPal and eBay.
"Customers have been telling us they want this, so we're going to give it to them," he said.