A transaction system for performing secure transactions over a
communication network includes (i) a merchant server system including a
computer processor and associated memory, the merchant server system
offering items for sale; (ii) a buyer system including a computer
processor and associated memory, the buyer system being selectively
couplable to the merchant server system over the communication network to
initiate a transaction, wherein, during the transaction, the buyer system
selects one or more of the items for purchase; (iii) a security server
system including a computer processor and associated memory and an
encryption device, the security server system receiving buyer information
from the buyer system, encrypting the buyer information in an encryption
key that prevents the merchant server system from decrypting the buyer
information, and transferring the encrypted buyer information to the
merchant server system; and (iv) a third server system including a
computer processor and associated memory, the third server system being
selectively couplable to the merchant server system, wherein the merchant
server system transmits at least a portion of the encrypted buyer
information to the third server system for processing during the
transaction.