PETALING JAYA: MyKad holders will soon be able use the card for verification to buy stocks, pay insurance premiums and make other online transactions after the launch of its identity verification system next month.

The National Registration Department (NRD), with the help of two digital signature verification companies, will be introducing the service for MyKad users.

Its director-general, Datuk Azizan Ayob, said the days of using conventional passwords to restrict certain websites to subscribing clients would change with the introduction of the verification system.

"The system will use the Public Key Infrastructure (PKI) that will offer organisations a secure and reliable means to verify clients before allowing them into the secure sites," he said in an interview.

Azizan said the MyKad would have a chip containing information that could be used to identify a user online.

"Service providers such as banks can use this to verify the identity of their clients."

He added that the MyKad would offer greater security compared to the conventional username and password mechanism.

"Before conducting a transaction online, a user will have to produce a personal identification number (PIN) that will enable the service provider to verify his identity through the Internet.

" This information would be transferred through a secure channel online to the service provider, he said.

The system would allow consumers to be spared the hassle of traffic jams and long queues to pay their bills, he said.

The MyKad transactions via the Internet are only applicable within Malaysia as the digital signature companies will be able to certify or verify MyKad holders here.

Azizan said: "If the PIN is hacked or compromised, the user is still protected, as the physical MyKad is still required to carry out future transactions. The user can then proceed to change his PIN without any hassle.

"This new verification solution is useful for those who want to create secure and trusted online applications such as Internet banking, stock broking companies, insurance and education sectors."