Safe payment method and system using smart card

The invention provides a safe payment method using a smart card and a payment system adopting the method. In the method, payment is performed in the payment system composed of a rear end system and a transaction terminal by adopting a smart card, the rear end system comprises a card issuer and an acquirer; when in transaction, a user inserts the smart card into the reader of the transaction terminal, the smart card drives the transaction terminal to safely acquire the transaction passwords of the user, the smart card adopts the encryption key of the card issuer to encrypt the acquired transaction passwords and feeds back the encrypted transaction passwords and the transaction information to the transaction terminal when the transaction terminal reads the transaction information, the transaction terminal acquires the information and directly transmits the information to the acquirer, the acquirer directly forwards the transaction to the card issuer, and the card issuer finishes the transaction. In the method, the smart card directly utilizes the encryption key of the card issuer to encrypt the transaction passwords, the transaction terminal requires no password input equipment, and the acquirer requires no additional encryption equipment, thus simplifying the structure of the payment system and enhancing the safety.