Abstract: A method of operating a circuit such as an integrated circuit carried on a plastic card which includes the steps of accepting a challenge, and generating a first response to the challenge using a first algorithm which operates on at least the challenge and a secret key derived from information relating to the circuit. The challenge may be generated, and accepted, by the circuit, with a corresponding challenge being generated externally of the circuit. Alternatively, the challenge is generated externally of the circuit and is then accepted by the circuit. A token count may be stored in the circuit and the first response is generated if a decrement command is successfully carried out on the token count.