Abstract: A cryptographic communications system includes a method and apparatus for exchanging messages between a user terminal, containing a secret key, and an operations center wherein each party authenticates signals received from the other party before any other information is exchanged. An initial identification message from the user terminal to the operations center contains an encrypted value of current time. The operations center checks the received message against local time to verify real time concurrent operation of the user terminal. Subsequently, the operations center and the user terminal mutually exchange encrypted challenge blocks, and each provide respective encrypted responses to the encrypted challenge blocks. The challenge and response exchanges demonstrate that each knows the secret key stored in the user terminal before other information, such as downloaded credit or uploaded data usage, is exchanged.