The invention relates to providing secure transactions with a tag and POS device associated with a host network authorization system. In doing so, the tag is adapted to bi-directionally communicate with a POS device, preferably a fuel dispenser, which further communicates with a host network to provide authorization of the tag and carry out any desired purchases or transactions. To avoid transmitting data from which valuable account or financial information could be derived, between the tag and POS device or the POS device and the host network system, the invention may maintain all or a majority of account and financial information requiring absolute security only at the host network. Neither the tag nor the POS device has or has access to certain critical financial or account information. The tag also is adapted to communicate with other local sources and the POS device directly. Additional and alternate security is available for these communications. Furthermore, the local sources may need a password to access certain data stored in the tag's memory.