Methods and systems for mutual authentication and personalizing a transaction device, such as a payment, transaction, or identity card. Successively generated one time codes are calculated by a first and second entity. One of the codes is transmitted to the second entity, which verifies the code is proper, then encrypts a second one time code using a third one time code and transmits the encrypted data to the first entity. The first entity decrypts the data using the third one time code, verifies the encrypted second one time code is proper, thereby mutually authenticating, and establishing a shared encryption key for subsequent communications, including transmission of personalization data.