A method for authenticating a payment service deployed on a payment device being used in a transaction comprising: generating on the payment device a first verification value unique to the transaction wherein said first verification value is derived from data comprising an account number and a first application transaction counter on the payment device, generating a payment record comprising the first verification value, payment data comprising the account number, the first application transaction counter, and an indicator that indicates that the transaction being conducted is a contactless transaction and that the payment record includes the first verification value; and communicating the payment record in a wireless data transmission from the payment device to a point of sale terminal, wherein the point of sale terminal transmits the payment record to a service provider computer, wherein the service provider computer receives the payment record, determines from the indicator in the payment record that the payment record includes the first verification value and that the transaction being conducted is a contact-less transaction, and compares the first application transaction counter to a second application transaction counter residing solely on the service provider computer to determine if the first application transaction counter is an expected application transaction counter, the second application transaction counter corresponding to the first application transaction counter, wherein, in case the first application transaction counter is the expected application transaction counter, the service provider computer further: independently generates a second verification value on the service provider computer, wherein the second verification value is generated from the account number in the payment data and the second application transaction counter using a same process as used to generate the first verification value, compares, based on a determination that the payment record includes the first verification value, the first verification value to the second verification value, approves the transaction if the first verification value matches the second verification value; and disapproves the transaction if the first verification value does not match the second verification value. generating on the payment device a first verification value unique to the transaction wherein said first verification value is derived from data comprising an account number and a first application transaction counter on the payment device, generating a payment record comprising the first verification value, payment data comprising the account number, the first application transaction counter, and an indicator that indicates that the transaction being conducted is a contactless transaction and that the payment record includes the first verification value; and communicating the payment record in a wireless data transmission from the payment device to a point of sale terminal, wherein the point of sale terminal transmits the payment record to a service provider computer, wherein the service provider computer receives the payment record, determines from the indicator in the payment record that the payment record includes the first verification value and that the transaction being conducted is a contact-less transaction, and compares the first application transaction counter to a second application transaction counter residing solely on the service provider computer to determine if the first application transaction counter is an expected application transaction counter, the second application transaction counter corresponding to the first application transaction counter, wherein, in case the first application transaction counter is the expected application transaction counter, the service provider computer further: independently generates a second verification value on the service provider computer, wherein the second verification value is generated from the account number in the payment data and the second application transaction counter using a same process as used to generate the first verification value, compares, based on a determination that the payment record includes the first verification value, the first verification value to the second verification value, approves the transaction if the first verification value matches the second verification value; and disapproves the transaction if the first verification value does not match the second verification value. independently generates a second verification value on the service provider computer, wherein the second verification value is generated from the account number in the payment data and the second application transaction counter using a same process as used to generate the first verification value, compares, based on a determination that the payment record includes the first verification value, the first verification value to the second verification value, approves the transaction if the first verification value matches the second verification value; and disapproves the transaction if the first verification value does not match the second verification value.