CAPTCHAs are a standard security mechanism used on many websites to protect online services against abuse by automated programs, or bots. The purpose of a CAPTCHA is to distinguish whether an online transaction is being carried out by a human or a bot. Unfortunately, to date many existing CAPTCHA schemes have been found to be vulnerable to automated attacks. It is widely accepted that state-of-the-art in text-based CAPTCHA design requires that a CAPTCHA be resistant against segmentation. In this paper, we examine CAPTCHA usability issues and current segmentation techniques that have been used to attack various CAPTCHA schemes. We then introduce the design of a new CAPTCHA scheme that was designed based on these usability and segmentation considerations. Our goal was to also design a text-based CAPTCHA scheme that can easily be used on increasingly pervasive touch-screen devices, without the need for keyboard input. This paper also examines the usability and robustness of the proposed CAPTCHA scheme.