Abstract: The embodiments herein provide a method and system for secure electronic transaction using a dongle device and a mobile device. The method comprises inserting a payment card in a dongle device. A type of the card is recognized to activate a respective card reader to read a card data which is processed by a microprocessor. The payment amount input by the user is transmitted along with the card data and a transaction related information through the mobile device to a payment server for processing the card data to authenticate the merchant using a mobile application. The mobile application resides on the mobile device or server. After authenticating the user by verifying the user input PIN, the received data and a transaction request is sent to a banking server to perform an electronic transaction.

Abstract: The various embodiments herein provide a system for a secure electronic transaction. The system comprises a dongle connected to a computing device for reading an electronic card data, a client application running on the client device for collecting a transaction information from a customer, a service provider system connected to the computing device through a first communication network for transmitting the collected transaction information and the audio signal from the computing device to the service provider system, a production server located at the service provider system for processing the received card data, a payment server for processing the audio signal, a second communication network for transmitting a processed card data from the production server to a payment system and a payment gateway running on the payment system for interfacing with the service provider system. The payment system performs the financial transaction by authenticating the customer and a merchant.