Abstract: A system and method for effecting electronic transactions includes a server for generating a challenge based on a transaction request. The challenge, as well as other information relating to the transaction is sent to a personal mobile device which includes a hardware secure module. The hardware secure module receives the information related to the transaction, prompts the user to approve the transaction and to enter a PIN, and calculates a response which is sent back to the server. The server verifies the response and approves or refuses the transaction based on the response.