Instead customers will use the handheld readers to verify their identity, inserting their card into the reader and entering their personal identification number.
The initiative, to be introduced in the second half of the year, will only initially be imposed upon those making third-party payments over the internet and its 'premier' banking customers.
Additional customers will receive the handheld readers if their banking activities require it.
"Pinsentry is the next generation of fraud prevention technology and Barclays is proud to be the first organisation in the UK to roll it out to its customers," Barnaby Davis, director for electronic banking, commented.
"The popularity of Barclays online banking service comes down to convenience and security and the introduction of Pinsentry will enhance both of these features."
The chip-and-pin payment technique, which replaced signatures as a customer verification method, has been greeted as a success in helping lower fraud since its introduction in February 2006.
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