Patent ID: 7941666

Claim:
A method for cryptographically authenticating a payment transaction conducted by a chip card configured for use with a compatible transaction verifier, comprising the steps performed by said chip card of: (a) retrieving from a nonvolatile memory in said chip card a transaction counter, and an intermediate key state corresponding to said transaction counter; (b) deriving a new intermediate key by applying a cryptographic update operation: (i) thereby preventing partial information about a plurality of predecessor intermediate keys from being combined to determine said new intermediate key; (c) incrementing said transaction counter and updating said intermediate key state in said nonvolatile memory; (d) using said new intermediate key to compute a cryptographic value authenticating at least an amount of a payment transaction; and (e) outputting to an external device said transaction counter and said cryptographic authentication value; where said transaction verifier, with knowledge of said counter and an initial key state for said chip card, will re-derive said new intermediate key used by said chip card in (d) by applying one or more key transformation steps, the maximum number of such step(s) depending logarithmically on a maximum value for said transaction counter.