Secure activation of stored value cards (30) at a point of distribution uses a portable activation secure application module (ASAM) (208) within the card dispensing machine (24) to activate each card. Each card has a standard user mode and a security user mode. In the standard user mode the card is activated and ready for use. In the security user mode the card is not active and cannot be used to make a purchase. An issuer (20) supplies an issuer activation key (40) to a card supplier (22) who produces a security code (72) which is stored on a stored value card (30). Cards are supplied to the issuer (20) in security user mode, and stored in a dispensing machine (24).
The issuer activation key (40) is also relayed to the dispensing machine and stored on the ASAM (208). Upon purchase by a customer (26), the issuer activation key (40) is used within the machine (24) by the ASAM (208) to reproduce the security code (72) and to activate a card. An activation control counter (ACC) is stored within the ASAM and is decremented for every attempt at activation of a card. ASAMs are maintained in the field using a dial-up connection to a central computer (202) with a control secure application module (CSAM) (206), or using a field secure application module (FSAM) (502) that is created at a central location using the CSAM (206). Each FSAM is able to update a limited number of ASAMs. A hierarchy of keys (600) is used by the CSAM, the FSAMs and ASAMs to ensure security.