A payment processing system comprising: a merchant payment computer comprising: a processor; and memory including instructions that, when executed on the processor, cause the merchant payment computer to: obtain an initial encryption key from a key management computer, the initial encryption key being derived from a base derivation key and a device identifier; generate a plurality of future transaction encryption keys using the initial encryption key, each future transaction encryption key being associated with a key serial number; and encrypt a message with one of the plurality of future transaction encryption keys; and a payment processing network computer comprising: a processor; and memory including instructions that, when executed with the processor, cause the payment processing network computer to, at least: receive, from the merchant payment computer, the encrypted message encrypted and a key serial number, the key serial number comprising the base derivation key, the device identifier, and a transaction counter; derive the future transaction encryption key based on the base derivation key, the device identifier, and the transaction counter; decrypt the message using the derived future transaction encryption key; and transmit transaction details obtained from the decrypted message to an authorization entity. a merchant payment computer comprising: a processor; and memory including instructions that, when executed on the processor, cause the merchant payment computer to: obtain an initial encryption key from a key management computer, the initial encryption key being derived from a base derivation key and a device identifier; generate a plurality of future transaction encryption keys using the initial encryption key, each future transaction encryption key being associated with a key serial number; and encrypt a message with one of the plurality of future transaction encryption keys; and a processor; and memory including instructions that, when executed on the processor, cause the merchant payment computer to: obtain an initial encryption key from a key management computer, the initial encryption key being derived from a base derivation key and a device identifier; generate a plurality of future transaction encryption keys using the initial encryption key, each future transaction encryption key being associated with a key serial number; and encrypt a message with one of the plurality of future transaction obtain an initial encryption key from a key management computer, the initial encryption key being derived from a base derivation key and a device identifier; generate a plurality of future transaction encryption keys using the initial encryption key, each future transaction encryption key being associated with a key serial number; and encrypt a message with one of the plurality of future transaction encryption keys; and a payment processing network computer comprising: a processor; and memory including instructions that, when executed with the processor, cause the payment processing network computer to, at least: receive, from the merchant payment computer, the encrypted message encrypted and a key serial number, the key serial number comprising the base derivation key, the device identifier, and a transaction counter; derive the future transaction encryption key based on the base derivation key, the device identifier, and the transaction counter; decrypt the message using the derived future transaction encryption key; and transmit transaction details obtained from the decrypted message to an authorization entity. a processor; and memory including instructions that, when executed with the processor, cause the payment processing network computer to, at least: receive, from the merchant payment computer, the encrypted message encrypted and a key serial number, the key serial number comprising the base derivation key, the device identifier, and a transaction counter; derive the future transaction encryption key based on the base derivation key, the device identifier, and the transaction counter; decrypt the message using the derived future transaction encryption key; and transmit transaction details obtained from the decrypted message to an authorization entity. receive, from the merchant payment computer, the encrypted message encrypted and a key serial number, the key serial number comprising the base derivation key, the device identifier, and a transaction counter; derive the future transaction encryption key based on the base derivation key, the device identifier, and the transaction counter; decrypt the message using the derived future transaction encryption key; and transmit transaction details obtained from the decrypted message to an authorization entity.