The invention discloses an on-site payment system and method implemented based on an identity authentication token. The on-site payment system comprises identity authentication token hardware, a commercial tenant client program and a transaction server. During an on-site transaction, a consumer inputs amount of money and other information through keys on an identity authentication token and presses down an enter key, and a sequence of transaction codes are calculated according to a secret key, an algorithm and required parameters set in the token and are converted into two-dimension codes to be displayed on a liquid crystal display screen; a commercial tenant scans the two-dimension codes with terminals such as a mobile phone where a payment client program is installed, and transaction codes obtained after the two-dimension codes are decoded are uploaded to a transaction server; the transaction server receives the transaction codes, and transaction data and authentication data are obtained through analysis; whether the transaction data are legal and valid or not can be recognized according to the authentication data, and corresponding transaction operations such as account transfer are executed if the transaction data are valid. According to the on-site payment system and method implemented based on the identity authentication token, transaction safety is ensured through the identity authentication token, the transaction data are transmitted through the two-dimension codes, the commercial tenant can scan the two-dimension codes with the mobile phone, the complexity of the cash-free transaction mode is reduced, user experience is improved, and the transaction cost is reduced.