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Correspondence

 VASCO Data Security International, Inc.

 1901 S. Meyers Road, Ste. 210

 Oakbrook Terrace, IL 60181

 VIA EDGAR

 July 14, 2009

 Kathleen Collins

 Division of Corporate Finance

 Securities and Exchange Commission

 Mail Stop 4561

 100 F Street, N.E.

 Washington, D.C. 20549

Re:
VASCO Data Security International, Inc.

 Form
10-K for the Fiscal Year Ended December 31, 2008

 Filed March 13, 2009

 Form 10-Q for the Quarterly Period Ended March 31, 2009

 Filed May 8, 2009

 File No. 0-24389

 Dear Ms. Collins:

 Set forth below are the responses
of VASCO Data Security International, Inc. (referred to herein using the words “VASCO”, “Company”, “we”, “our” and “us”) to your letter of comment dated June 30, 2009 (the “Letter”)
relating to the above-referenced Form 10-K (the “Form 10-K”) and Form 10-Q (the Form 10-Q”). The comments from the Letter are repeated below, and, for convenience of reference, the number beside each of the following comments
corresponds to the paragraph numbering indicated in the Letter.

 Form 10-K for the Fiscal Year Ended December 31, 2008

 General

1.
We note from disclosure on pages 16 and 32 that you conduct operations in the Middle East and Africa, Iran and Syria, located in the Middle East and Sudan, located in Africa, are
identified by the State Department as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. We note that your Form 10-K does not include disclosure regarding contacts with, Iran, Syria, and Sudan. Please
describe to us the nature and extent of your past, current, and anticipated contacts with the referenced countries, if any, whether through subsidiaries, resellers, retailers, distributors, or other direct or indirect arrangements. Your response
should describe any products, equipment components, technology, and services you have provided to those countries, and any agreements, commercial arrangements, or other contacts you have had with the governments of those countries or entities
controlled by those governments.

 July 14, 2009

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 Response:

 We confirm that, since January 1, 2006 (the period covered by the Form 10-K), neither VASCO nor any of its subsidiaries has sold or
supplied any products, equipment, components or technology, or furnished any services, to any person, firm or other entity located in any country that has been designated by the U.S. Department of State as a state sponsor of terrorism (a
“terrorist supporting country”), including, but not limited to, Iran, Syria and Sudan. Moreover, to the best of our knowledge, no VASCO distributor, retailer or reseller has sold or supplied any of our products, equipment, components,
technology or services to any person, firm or other entity located in any terrorist supporting country.

 VASCO and its
subsidiaries, including our entities located outside of the United States, are committed to strict compliance with United States export control and economic sanctions laws and regulations, including those laws and regulations that prohibit
transactions with terrorist supporting countries. In furtherance of that commitment, we have taken the following steps to assure that none of our products, equipment, components or technology or services, regardless of country of origin, will be
sold or supplied, directly or indirectly, to any such terrorist supporting country:

 a. Our internal corporate policy
specifically prohibits the sale of any of our products directly or indirectly to any terrorist supporting country or any entity in any terrorist supporting country. In accordance with that policy, on those occasions in which a VASCO distributor has
inquired about the purchase of our products for resale to or in a terrorist supporting country (i.e., Iran), that inquiry has been summarily rejected by us.

 b. Our current form of international distribution agreement mandates that the distributor must comply strictly with all United States
Export Administration Regulations and other applicable laws (e.g., the Office of Foreign Assets Control (“OFAC”) economic sanctions regulations) with respect to the export, re-export, transfer, sale or other disposition of our products,
and such agreement specifically forbids the export, re-export or other transfer, directly or indirectly, of any our products to any destination, company or person prohibited by these export controls (e.g., Cuba, Iran, North Korea, Sudan and Syria).

 c. Our standard sales order acknowledgement includes a provision that specifically places our customers on notice that the
VASCO products supplied pursuant to that sales document are subject to United States Export Administration Regulations and other applicable laws (e.g., the OFAC economic sanctions regulations), and specifically prohibits the customer from exporting,
re-exporting or otherwise transferring, directly or indirectly, any of our products to any destination, company or person prohibited by these export controls.

 July 14, 2009

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2.
It appears from various news articles and from internet websites that Arab Bank, Abu Dhabi Commercial Bank and FVC, Inc. are or were your customers and that Arab Bank has
operations in Syria and Sudan; Abu Dhabi Commercial Bank has operations in Iran, and FVC Inc. has operations in Iran and Syria. Please tell us whether these companies use your solutions, products or services in their operations in Iran, Sudan or
Syria.

 Response:

 We confirm that our wholly-owned Belgian subsidiary, VASCO Data Security N.V. (“VASCO Belgium”) has sold VASCO products to each
of FVC, Inc., Arab Bank and the Abu Dhabi Commercial Bank. None of our products have, however, been sold or supplied by VASCO Belgium to any office or other facility of any of the foregoing entities located in any terrorist supporting country,
including, but not limited to, Iran, Sudan or Syria. In each instance, VASCO Belgium has dealt exclusively with, and has supplied our products exclusively to: (i) FVC Inc.’s headquarters located in Dubai, United Arab Emirates;
(ii) Arab Bank’s headquarters located in Amman, Jordan; and (iii) the Abu Dhabi Commercial Bank’s headquarters located in Abu Dhabi, United Arab Emirates.

 VASCO Belgium has a supply agreement only with FVC, Inc., and that supply agreement specifically defines the countries in which FVC may
sell VASCO products, which defined countries exclude the identified terrorist supporting countries. The agreement also specifically forbids the export, re-export or other transfer, directly or indirectly, of any of our products to any destination,
company or person prohibited by United States Export Administration Regulations and other applicable laws. Moreover, the FVC, Inc. website does not identify any FVC office or affiliate located in any terrorist supporting country, and we are not
aware of any such office or affiliate of FVC, Inc. in any such country.

 VASCO Belgium’s sales of our products to Arab
Bank and the Abu Dhabi Commercial Bank have been made either through our distributors or pursuant to purchase orders issued by those banks to VASCO Belgium directly. Each time that VASCO Belgium receives a purchase order directly from one of those
customers, VASCO Belgium issues a sales order acknowledgement which specifically prohibits the export, re-export, or other transfer, directly or indirectly, of any of our products to any destination, company or person prohibited by U.S. export laws
and controls.

 We are not aware of any export, re-export, transfer or diversion of any our products supplied to FVC, Inc.,
Arab Bank or the Abu Dhabi Commercial Bank to any person, firm, entity or location in any terrorist supporting country, including, but not limited to, Iran, Sudan or Syria.

 July 14, 2009

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Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

 General, page 30

3.
We note your disclosures on page 32 where you indicate that revenues in fiscal 2008 were impacted by an increase in the number of hardware DIGIPASS units sold, which was
partially offset by a decline in the average price of such units. Tell us how you considered discussing in quantified terms the extent to which material changes in revenue were due to changes in volume versus changes in pricing. Refer to
Item 303(a)(3)(iii) of Regulation S-K.

 Response:

 We have disclosed and quantified the items that management uses to understand the change in the business (“…through the eyes of
management…”) as required by SEC Release No. 33-6835. Management does not quantify the specific impacts of changes in quantities and prices, but management does believe that it has disclosed the factors that it believes are:

a.
Material,

b.
Not misleading to investors, and

c.
Non-confidential

 While changes in revenue
are related to changes in quantities sold and changes in price, management has not attempted to quantify the specific impacts of changes of either quantities or prices because of the complexity in computing specific numbers that management would
deem valuable in helping to run the business. With regards to our business model and as disclosed in the Form 10-K, our unit price to customers varies with, among other things, the specific products sold (we have over 50 multi-application products
that perform similar functions, but have different sales prices) and the size of the customer’s order. These differences can create significant changes in the average selling price per unit, the average cost per unit and the resulting gross
profit rates when comparing our results from different reporting periods. Differences due to our volume discount strategy exist not only between the banking and enterprise security markets, but also within those markets. While purchases in the
enterprise security markets are generally for smaller quantities and higher unit prices than the banking market, there are exceptions where enterprise customers buy large quantities and receive lower prices. Similarly, while the purchases in the
banking market are generally for larger quantities and lower unit prices than in the enterprise security market, there are banks of all sizes that purchase a full range of quantities and the resulting prices vary substantially. Management has built
its basic pricing structure by product on the volume discount principle and we, therefore, do not analyze our period-over-period results at a micro level or use such data to manage the business on a day-to-day or long-term basis.

 July 14, 2009

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 In addition to the above, we have not disclosed the specific impact of volume versus
changes in pricing for the following reasons:

 a. The data, if disclosed at a macro level, may be misleading to investors as it could vary
substantially from period to period based on the mix of orders in a particular period and may not be indicative of market demand or our future performance. We believe that investors could be misled by variations in the reported data in either
direction (become overly optimistic based in periods that included large orders or overly pessimistic in periods when there is an absence of larger orders). As noted in our disclosure of backlog on page 15 of Form 10-K, we are still a relatively
small company whose results can vary significantly from period to period based on the timing of receipt/shipment of orders and the relative size of orders.

 b. Management does not use this data to manage the business. As noted above, management has built what it considers to be front end controls (i.e., price lists that vary with model and volume) rather than capturing
and analyzing data on an after-the-fact basis. Management believes that the cost of developing the data in sufficient detail to not be misleading to investors would exceed the benefit to investors.

 c. The public disclosure of such data, if it were to be developed, would be harmful to us and our investors, as it is highly confidential data that:

 i. Could be used by competitors to our disadvantage as this would involve disclosing highly competitive pricing information. Our key
competitors have similarly not disclosed such details, we believe for competitive reasons.

 ii. Could confuse customers and interfere with
the sales process as customers try to understand the pricing of the transaction proposed to them compared to the detailed information disclosed.

 Apart from volume and pricing data discussed above, in this Response to Comment 3, we have quantified and disclosed the other material factors that have impacted the comparison of our sales, which factors include the
increase in business coming from non-hardware revenues and the impact of changes in exchange rates.

4.
There are many instances where two or more sources of a material change have been identified, but the dollar amounts for each source that contributed to the change were not
disclosed (e.g. revenue, gross profit, sales and marketing, general and administrative, etc.). For instance, you list several factors that contributed to the increase in gross profits in fiscal 2008; however you do not quantify what impact each
factor had on your gross profit margins. Similarly, you indicate that the increase in sales and marketing expense was due to an increase in average headcount, costs related to opening new offices, an increase in marketing programs and an increase in
travel expenses, however, you do not quantify the increase for each. Tell us what consideration you have given to quantifying each source that contributed to a material change pursuant to Section III. D of SEC Release 33-6835.

 July 14, 2009

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 Response:

 In preparing our disclosures in accordance with Section III.D of SEC Release 33-6835, we believe we have disclosed the causes of material
changes to the extent necessary to gain an understanding of our business as a whole. In response to your comments regarding revenue, gross profit and expenses, we respectfully provide the following:

 a. Revenue - We believe that we have addressed these comments in our Response to Comment 3 above.

 b. Gross profit - We have identified on pages 35 and 36 of the Form 10-K each of the factors that management believes were material to the change in our
gross profit. We have not disclosed amounts for some of these factors, for example, costs reductions in manufactured products, or the average sales price per hardware DIGIPASS unit, as this is confidential and proprietary information that is
highly competitive, the disclosure of which would be materially injurious to our business. Furthermore, management does not prepare or use a reconciliation of gross profit by individual factor. Our mix of products sold can vary
significantly from period to period depending on customer orders. As noted in our Response to Comment 3, we have over 50 multi-application products and our prices to customers may vary significantly based on the size of a customer’s
order. Further, we believe that the cost of performing and presenting a factor-by-factor analysis would exceed the benefit. For example, we provide a general estimate of the impact of exchange rates, but the computation is based on sales
transactions made in the current period and does not consider changes in the mix of products sold, the margin rates of products sold or changes in countries and related currencies in which the products were sold, each compared to the comparable
period — the cost of capturing and analyzing such data would, in our opinion, significantly exceed the benefit derived from the computation’s result. We, instead, discuss the key factors that management has
identified for a period and describe how management considers them to have impacted gross profit, subject to not discussing cost and pricing information that is confidential, proprietary and highly competitive, the disclosure of
which would be materially injurious to our business.

 c. Expenses - Management believes that