Patent ID: 8806603

Claim:
A method for operating a security device, said method comprising the steps of the security device: receiving a request for a transaction from an application programmable device executing an application sanctioned by an application controlling institution, wherein the transaction is between the application and the application controlling institution, and has been initiated by the application programmable device; generating a first one-time identifier, the first one-time identifier comprising a unique identification of the security device and a one-time transaction ID, wherein said one-time transaction ID is not generated randomly and is not coordinated with any device other than the security device; and communicating to the application programmable device the first one-time identifier, in which the application verifies a validity of the security device identification and, upon verification of said validity, instructs the application programmable device to communicate the first one-time identifier and the transaction to the application controlling institution for processing, wherein the application controlling institution verifies a validity of the first one-time identifier and, upon verification of the validity, processes the transaction; wherein: said security device, application programmable device, and application controlling institution securely process the transaction without using encryption, a PIN, or a password; the transaction request comprises an application controlling institution identification; and the security device stores the transaction request and the one-time transaction ID, in order to form an audit trail.