The Royal Bank of Scotland is to become the second bank in a month to give out handheld chip and PIN readers to customers.

The move follows Barclays’ announcement last month that it would hand out chip and PIN devices to 500,000 customers.

RBS will issue card readers to online banking customers, who will be required to use them to authenticate their identity before carrying out transactions.

The devices, provided by Xiring, use industry standards set by UK payments association Apacs.

Users will insert their bank cards into the device, type in their PIN code and a second ‘challenge’ code provided by the bank. The reader will then display a single-use password generated by the card chip which can then be used to access banking services via the RBS website.

Xiring’s contract with RBS also includes provision of fulfilment services and distribution of the readers to the bank’s customers.