The invention comprises a method of authenticating and encrypting a client-server communication, comprising the steps of: a) generating a first one-time password (OTP1) and a second one-time password (OTP2) from a cryptographic token; b) generating an encryption key (K_ENC) and a MAC key (K_MAC) based on OTP2; c) preparing and protecting the client data using K_ENC and K_MAC; d) sending a request message from the client to the server, the request message containing the protected client data, a cryptographic token identifier (TID) and OTP1; e) validating OTP1 at the server, and generating OTP2 at the server upon successful validation; f) deriving K_ENC and K_MAC from OTP2 at the server; g) processing the request message and generating result data h) encrypting the result data using K_ENC and creating a digest using K_MAC; i) sending the encrypted result data to the client; and i) decrypting the result data at the client using K_ENC and verifying the authenticity of the result data using K_MAC.