The idea is not new, Estonia has been doing phone based authentication for years, but the timing is right.

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But RSA, the security division of EMC, says 220 companies, including Target, Sears, Macy's, Sprint, T-Mobile and 14 of the 20 largest U.S. financial institutions, use its "knowledge-based authentication" (KBA) service and that it has a "false failure" rate (meaning folks flunking on erroneous public info) of less than 5%.

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Google wants to hand off its proposal to standards bodies in the hopes that some form of PKI-based token authentication will be widely adopted by everyone from browser manufacturers, to website owners to device makers.

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PhoneFactor is one company that is gaining traction with two factor (strong) authentication based on mobile devices.

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It did so by offering single sign-on, knowledge-based and multi-factor authentication options, which ensure that the right person signs the right document consistently.

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In order to maintain a good, consistent consumer experience, both telcos and banks should stick to their current methods of registration, authentication (SIM based) and other data checks deemed necessary for checks while registering a user for financial transactions.

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Most of these transactions involve SMS based payments, direct mobile billing using PIN and one time password authentication and mobile web payments.

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Handset manufacturers are also doing their bit by enabling NFC chip-based phones for NFC-enabled transactions that provide security of personal data with proper authentication.

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In particular the web giant is exploring hardware authentication options and experimenting with a device called YubiKey -- a USB-based token system.

ENGADGET