A method is provided for establishing mutual authentication and secure communications between a microprocessor-based transaction evidencing device (100) and a microprocessor-based server (120) coupled thereto. A session key K S is generated at the transaction evidencing device (100) and encrypted with a first key K 1 to form a first message. The first message is sent to the server (120) and decrypted using a second key K 2 . In response to the first message a second message is generated at the server (120) and encrypted using the session key K S . The encrypted second message is sent to the transaction evidencing device (100) and decrypted using the session key K S . A response to the second message is generated at the transaction evidencing device (100) and is signed using a third key K 3 . The signed response is encrypted with the session key K S and transmitted to the server (120). The encrypted signed response is decrypted using the session key K S and the signature is verified using a fourth key K 4 .