Systems and methods for processing mobile payments by provisoning credentials to mobile devices without secure elements

A system for generating and provisioning payment credentials to a mobile device without the use of a secure element (SE), the system comprising one or more processors and a non-transitory memory storing instructions that, when executed by the one or more processors, cause the one or more processors to:

• store, in a database, at least a storage key, a plurality of dynamic card validation code keys, and an application transaction counter associated with a mobile application program;
• provision, to the mobile device, at least the storage key, an authentication component, and static payment credentials, wherein the static payment credentials are associated with a payment account;
• receive, from the mobile device, a chip authentication program (CAP) token generated based on at least the static payment credentials;
• validate the authenticity of the received CAP token;
• generate a session key unpredictable number (KSUN);
• generate a cloud unpredictable number (UNCLOUD);
• identify an encrypted payload based on a derived dynamic card validation code key (KDCVC3), wherein the encrypted payload includes at least a dynamic card validation code key of the plurality of dynamic card validation code keys, the KSUN, and the application transaction counter;
• transmit the encrypted payload to the mobile device for use in generating a dynamic card validation code for use in a financial transaction;
• and
• transmit at least the KSUN, UNCLOUD, and application transaction counter to an issuer associated with the payment account for use in validating the generated dynamic card validation code used in the financial transaction.