SecProbe.io

November 1, 2011
 Via E-mail

Mr. Clifford Bown Chief Financial Officer Vasco Data Security International, Inc. 1901 South Meyers Road, Suite 210 Oakbrook, IL 60181
Re: Vasco Data Security International, Inc.
 Form 10-K for Fiscal Year Ended December 31, 2010
Filed March 11, 2011 Form 10-Q for Fiscal Quarter Ended June 30, 2011 Filed August 5, 2011 File No. 000-24389

Dear Mr. Bown:

We have reviewed your letter dated Oct ober 13, 2011 in connection with the above-
referenced filings and have the following commen ts.  In some of our comments, we may ask you
to provide us with information so we may better understand your disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have addi tional comments.  Unless otherwise noted, where
prior comments are referred to they refe r to our letter dated September 28, 2011.
 Form 10-K for Fiscal Year Ended December 31, 2010

 Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

 Income Taxes, page 43

 1. In your response to prior comment 2 you indica te that the geographic mix of earnings
from your foreign subsidiaries depends on the level of your service provider subsidiaries’
pretax income, which is recorded as expense in the two entities th at own the intellectual
property.  Please provide a list of your fore ign subsidiaries and service provider
subsidiaries and clarify for us whether th e two differ.  Also explain further the

 Clifford Bown Vasco Data Security International, Inc November 1, 2011 Page 2
 relationship between the service provider subsidiaries and th e two entities th at own your
intellectual property as it is unclear why the servi ce provider subsidiaries’ pretax income
would be recorded as expense by the U.S. and Swiss entities.  In addition, explain further
the various factors noted in your  response that may impact the level of pre-tax income in
your service provider subsidiaries.  In this regard, describe how the staff, programs and
services offered by the various subsidiaries impacts the pre-tax income for your service provider subsidiaries; tell us how often ma nagement makes changes to these programs;
and how such changes impact your effective ta x rates.  Lastly, you state that you will
provide a commentary in the general section of MD&A w ith an overview of the tax
structure and how various elements can impact the effective rate.  Please provide us with
a draft of your proposed disclosure.
 Liquidity and Capital Resources, page 44

 2. We note that you confirm in your response to prior comment 4 that you will disclose the
amount of cash and cash equivalents held in  non-U.S. commercial banks and include a
discussion regarding that fact that additional taxes may be assessed in the event of the repatriation of foreign earnings.  Please confir m that you will include such disclosures in
your September 30, 2011 Form 10-Q.

Form 10-Q for Fiscal Quarter Ended June 30, 2011

 Notes to Consolidated Financial Statements

 Note 1 - Summary of Significant Accounting Policies

 Revenue Recognition, page 8

3. We note your response to our prior comment  5.  Based on the additional information
provided in your response, it remains unclear ho w you establish fair value for the units of
accounting in your multiple element arrangements.  You state the hardware and host system software have no value on a standal one basis and effectivel y you do not sell them
separately.  If this is true, it seems the hardware and host system software would be
considered one unit of accounting.  Theref ore it is unclear why you determine the
estimated selling price for the hardware and th e software separately to account for these
transactions.  Please further clarify wh at your units of accounting are in these
arrangements and how fair value is established for each.

 Clifford Bown Vasco Data Security International, Inc November 1, 2011 Page 3
 You may contact Melissa Kinde lan at (202) 551-3564 if you have questions regarding
comments on the financial statements and relate d matters.  Please contact me at (202) 551-3499
with any other questions.
Sincerely,
   /s/  Kathleen Collins
Kathleen Collins Accounting Branch Chief