Abstract: A credit card system uses an encryption algorithm to generate a first encoded text from the card number and a password supplied by the user. The card user is verified by comparison of the first encoded text with an encoded text recorded on the card. When the transaction is completed, the merchant generates a receipt containing a first verification code generated from the date and time of the transaction, the merchant's identification number, the password, and the card number. To receive payment, the merchant presents the receipt to the credit card center. The credit card center generates a second verification code from the card number, the password which is retrieved from the central database, the merchant number, and the time and date of the transaction. If the two verification codes match, the merchant is credited with the amount of the transaction.