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                              PEPPER HAMILTON LLP

                                                                Robert B. Murphy
                                                       direct dial: 202.220.1454
                                                           murphyr@pepperlaw.com

                                  June 17, 2005

VIA EDGAR

Mark P. Shuman
Branch Chief - Legal
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549

                 Re: VASCO Data Security International, Inc.
                     Form S-3 filed April 29, 2005
                     Registration No. 333-124458

                     Form 10-K filed March 31, 2005
                     File No. 0-24389

Dear Mr. Shuman:

          On behalf of VASCO Data Security International, Inc. (the "Company"),
we are hereby responding to comments by the staff (the "Staff") of the Division
of Corporation Finance contained in your letter dated May 26, 2005 (the "Comment
Letter"), in connection with the above-captioned registration statement (the
"Registration Statement") and annual report (the "Form 10-K"). For the
convenience of reference, each of the Staff's comments are reproduced below
under the Staff's topics headings followed in each case by the related Company
response.

FORM S-3
GENERAL

     1.   We note that you have just filed an amended Form 8-K that includes a
          signed opinion of the auditors. But that Form 8-K amendment was not
          filed within 71 days after the date of the initial Form 8-K announcing
          the acquisition was required. Please provide your analysis concerning
          the effect of your apparent failure to file the BERK Accountants'
          report on a timely basis. Why do you

Mark P. Shuman
June 17, 2005
Page 2

          believe you comply with Instruction A(3)(b) to Form S-3, which
          requires timely filing of all required Exchange Act reports for the
          prior twelve calendar months prior to the filing of your registration
          statement.

     RESPONSE:

          The Company was proceeding under the belief that the Form 8-K/A filing
          that it made on April 20, 2005 was complete in all respects. The
          Company handled the Form 8-K/A filing with its financial printer who
          Edgarized and transmitted the filing. It appears from our review of
          the circumstances surrounding the transmission of the filing that the
          individual file containing the single page opinion was inadvertently
          dropped from the version of the filing sent to the printer. The
          Company was unaware of this until the Staff brought it to our
          attention in a phone call with the undersigned regarding the Staff's
          review of the Registration Statement. Upon confirmation of the dropped
          file, the Company promptly filed an additional Form 8-K/A, including a
          currently dated accountant's consent, with the signed opinion. Its
          instructive to note that a dated accountant's consent referencing the
          opinion was filed with the original Form 8-K/A demonstrating the good
          faith effort by the Company to meet its filing obligations and
          preserve its Form S-3 eligibility.

          The Company believes that the inadvertent dropping of the opinion File
          did not negatively affect the public interest nor the protection of
          investors and should not disqualify its eligibility for using Form
          S-3. In this regard, the audited financial statements and accountant's
          consent were timely filed and provided the investing public with the
          material information upon which they could make informed investment
          decisions. Further, the inadvertent dropping of the opinion itself
          would not constitute a "material" omission under the concept of
          materiality presented by the Supreme Court in TSC Industries Inc. v.
          Northway Inc., 426 U.S. 438 (1976), where in the Court stated that an
          omitted fact is material if it would have assumed actual significance
          in a reasonable person's deliberations.

          The Company respectively submits that disqualifying it from
          eligibility to use Form S-3 would amount to a severe penalty for the
          inadvertent dropping of the opinion page and would impose a severe
          hardship on the Company.

Mark P. Shuman
June 17, 2005
Page 3

ACCOUNTING
GENERAL

     2.   Please note the updating requirements of Rule 3-12 of Regulation S-X.

     RESPONSE:

          The Company will comply with the updating requirements of Rule 3-12 of
          Regulation S-X in connection with any further amendments to the
          Registration Statement.

FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

MANAGEMENT'S DISCUSSION & ANALYSIS (MD&A) OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES, PAGES 26 TO 27

     3.   Supplementally explain how you considered SEC Release 33-8350 in
          determining whether or not a discussion of the Company's revenue
          recognition policy as a critical accounting policy was necessary.
          Please keep in mind that your critical accounting policies and
          estimates discussion should serve as a supplement to the financial
          statement footnotes and describe how estimates and related assumptions
          were derived, how accurate the estimates and assumptions have been in
          the past, and whether the estimates and assumptions are reasonably
          likely to change in the future. They should also provide quantitative
          as well as qualitative information when information is reasonably
          available.

     RESPONSE:

          Management does not believe that a discussion of the revenue
          recognition policy is needed to satisfy any of the three principal
          objectives of SEC Release 33-8350. Management's thoughts relative to
          the three objectives are as follows:

          a.   "...enables investors to see the company through the eyes of
               management": The vast majority of our revenue, over 92% in 2004,
               is generated from the shipment of security hardware ("Tokens")
               and there is little judgment involved in applying our policy. The
               Company's policies are generally consistent with other companies
               whose revenues are derived from the

Mark P. Shuman
June 17, 2005
Page 4

               shipment of product (i.e., revenue recognized when product is
               shipped, title passes to buyer, and the Company has fulfilled all
               of its performance obligations). The key component that is viewed
               "through the eyes of management" is related to establishing
               proper internal controls related to ensuring proper cutoffs,
               which controls are discussed in Items 9 and 9A of the Form 10-K.

               The other aspect of revenue recognition that may be viewed
               "through the eyes of management" relates to multiple element
               arrangements, however, such transactions are not significant in
               total and accordingly, are not a focus of management in directing
               the business day-to-day. As discussed, the token component of
               such agreements is the most significant component of the
               transaction. See the answers to question 7 below, which discusses
               the significances of revenues by type of revenue, and question 9
               below related to multiple element arrangements.

          b.   "... to enhance the overall financial disclosure and provide the
               context within which financial information should be analyzed":
               Disclosure of revenue recognition polices for areas other than
               the shipment of product, which may be less consistent among
               company's filing annual reports on Form 10-K, are included in the
               footnotes to the financial statements. Also, since there are no
               critical accounting estimates involved with the revenue
               recognition policy, there is nothing for the investor to consider
               within the context of analyzing the financial information.

          c.   "...to provide information about the quality of, and potential
               variability of, a company's earnings and cash flow, so that
               investors can ascertain the likelihood that past performance is
               indicative of future performance": This section does not apply as
               the revenue recognition policy does not result in any material
               variability in the Company's earnings and cash flow. Even though
               the Company has a growing distributor/reseller network, those
               distributors do not hold any material amount of inventory. The
               Company's experience with the distributor/reseller network is
               that there is a short time period between the order being placed
               and the resulting distributors/reseller sale to their customer.
               We believe that the period is and will continue to be short as
               sales to distributors/resellers are final, with title passing to
               the distributor/reseller upon shipment, invoices being payable by
               the reseller in 30 days, and with no right of return.

Mark P. Shuman
June 17, 2005
Page 5

     4.   We note that you provide warranty and volume purchase discounts to
          customers. Supplementally explain how you considered the guidance in
          SEC Release 33-8098 to include a discussion of the methodology and
          assumptions underlying these estimates, the effect the accounting
          estimates have on the company's financial presentation, and the effect
          of changes in the estimates.

     RESPONSE:

          Neither warranty or volume purchase discounts involve assumptions that
          are "highly uncertain", as defined within SEC Release 33-8098, at the
          time of estimation. A discussion of each follows:

          a.   Warranty claims are monitored to determine the proper level of
               reserve needed. Given that our Tokens contain only a few
               components and the manufacturing is done on a contract basis with
               companies that produce high-quality electronic goods in large
               quantities, the Company has historically experienced minimal
               actual claims over the warranty period.

          b.   There is no estimate involved with volume purchase discounts. The
               Company negotiates specific prices for large orders that consider
               the quantity being purchased (described as a "volume-purchase
               discount" as generally the Company is willing to accept a lower
               per-unit price for higher quantities). The resulting purchase is
               for a fixed price and is supported by a firm, binding purchase
               order or contract wherein the contracted quantities are to be
               delivered over a specific period of time, which is generally less
               than 12 months.

ITEM 9A. CONTROLS AND PROCEDURES, PAGES 30-31

     5.   Your conclusion that the disclosure controls and procedures were
          effective to ensure that "material information relating to the company
          and its consolidated subsidiaries would be made known to them on a
          timely basis" addresses matters that are narrower in scope than the
          definition of "disclosure controls and procedures" in Rule
          13[a]-15(e). In your response letter, tell us whether you the
          conclusions concerning effectiveness were reached with respect to
          "disclosure controls and procedures" as defined in the referenced
          rule. In future filings, please ensure the conclusion concerning
          effectiveness conforms to the applicable definition. Also, clarify
          that the conclusion as to effectiveness is provided as of the end of
          the applicable financial statement period.

Mark P. Shuman
June 17, 2005
Page 6

     RESPONSE:

          The Company's management evaluated, with the participation of its
          principal executive and principal financial officers, the
          effectiveness of its disclosure controls and procedures as of the end
          of the period covered by the Form 10-K and concluded that its
          disclosure controls and procedures were effective to ensure that all
          information required to be disclosed in its reports filed with the
          Commission was recorded, processed, summarized and reported within the
          time period specified. In future filings, the Company will ensure that
          its conclusions in this regard conform with Rule 13a-15.

CHANGES IN INTERNAL CONTROLS

     6.   You indicate that there were no "significant" changes in internal
          controls during the quarter ended 2004. Please refer to Item 308(c) of
          Regulation S-K and note that you are required to report any changes in
          internal control over financial reporting that have materially
          affected or are reasonably likely to materially affect Vasco's
          internal controls over financial reporting. Please advise in this
          respect, and confirm that you will consider this comment in the
          preparation of future periodic reports.

     RESPONSE:

          There were no changes in the Company's internal controls over
          financial reporting identified in connection with its evaluation
          required by Rule 13a-15(d) during the fiscal quarter that has
          materially affected, or is reasonably likely to materially affect, its
          internal control over financial reporting. In future filings, the
          Company will ensure that its disclosures in this regard conform with
          Item 308(c).

FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATION, PAGE F-4

     7.   Supplementally explain how you considered the requirements of Rule
          5-03(b)(1) and (2) of Regulation S-X to disclose product and service
          revenues and their respective costs separately.

Mark P. Shuman
June 17, 2005
Page 7

     RESPONSE:

          The primary source of revenue is from the sale of Tokens. The
          secondary and tertiary sources of revenue are from the sale of
          software and services, respectively.

          The breakdown of revenues between the three categories in 2004 was
          approximately $27.7 million or 92.5% from the sale of Tokens, $1.5
          million or 4.8% from the licensing of software, and $0.8 million or
          2.6% from services and other sources of revenue. In 2003, the
          breakdown was 93% tokens, 4% software and 3% services/other. Software
          and service revenues, each being less than the 10%, are combined with
          Token revenue as permitted under Rule 5-03(b)(1) and (2).

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, PAGES F-8 TO F-11
REVENUE RECOGNITION, PAGES F-8

     8.   We note your disclosures regarding your revenue streams such as
          license fees, support agreements and consulting and education
          services. Tell us whether you recognize revenue pursuant to SOP 97-2
          or SAB 104 and supplementally explain how you apply such guidance to
          each of your revenue streams.

     RESPONSE:

          Depending on the terms of the arrangements, VASCO recognizes revenue
          in accordance with either SOP 97-2 or SAB 104 when there is persuasive
          evidence that an arrangement exists, delivery has occurred, the fee is