Essentially, an authenticator is needed to either add money or send any earnings to your Battle.net balance. The only two options open to players is to either purchase a physical token or download the free app on a smart phone.
Blizzard confirmed the workings of the new security system in a post on their official forum:
“For clarity, this means you’ll need to have an Authenticator to add to your balance via Battle.net Account Management or to send the proceeds of your real-money auction house sales to your Battle.net Balance.
“Please note that players who previously added Battle.net Balance to their account prior to this change will be able to use it to make eligible purchases on Battle.net and in the auction house without attaching an Authenticator. However, an Authenticator will be required to add to your balance in the future, as explained above.”
Analysis: With a system in place that deals with real money in a real economy, security is of the utmost importance. Even though it creates another hurdle to jump through to log into your account, I think the added level security is a good trade off and will hopefully provide an insurmountable hurdle for any would be hackers.
Just in case you weren’t fond of the idea of giving Blizzard more of your money, it’s worth mentioning that the company proclaims that no profit will be made on the tokens themselves once production costs are taken into consideration. Mostly though, I’d imagine a significantly large amount of users would have access to a smart phone, allowing them to download the free app.
Although I’m not a Diablo III player, I’m more than a little interested in seeing how the real-money auction house turns out once it’s unleashed on the public—and more importantly, how the public reacts to such a feature after getting some hands on time with it.