A method of operating a keyless padlock is provided, comprising: establishing communication with the padlock; requesting the padlock serial number from the padlock; receiving the padlock serial number form the padlock; establishing communication with a server having the padlock serial number and the initial password stored in a database; transmitting the padlock serial number to the server with a request to own the padlock; receiving the initial password and a new password from the server after the server has validated the request; transmitting the initial password to the padlock; transmitting the new password to the padlock after the padlock has validated the initial password; receiving confirmation from the padlock that the padlock has stored the new password in the memory of the padlock; and transmitting the confirmation to the server, whereupon the server updates the database to recognize the user as the owner of the padlock.