Cloud computing is the most emerging trend in computing. It provides numerous services like IaaS, PaaS and AaaS. It is a form of pay-per-use based computing. Although it provides tremendous services but there are numerous security issues which need to be resolved. User authentication in cloud computing is the most important step intended towards data security. Image-based authentication is one of the best techniques for user authentication based on the order of selected images. However, key exchange and data encryption in such a complex environment is very difficult to implement. Proposed scheme resolves existing issues of Image based Authentication with Secure key Exchange Mechanism and implements Captcha to detect machine user and Elliptic Curve Cryptography (ECC) for secure key exchange. ECC is the best asymmetric cryptographic algorithm which involves very less key size and computing steps. Hence, it provides a secure layer to cloud computing which deals with user authentication, key exchange and data encryption. © Springer Nature Singapore Pte Ltd. 2016.