16/11/2021

What is point-to-point encryption (P2PE)?

By Mariana Almeida Marques

Ensuring payment security is key in delivering an excellent payment experience to customers. Point-to-point encryption is one of the most popular tools used to protect customers’ details during the payment process. In this article, we explain what is P2PE, how it works and the advantages of implementing it in your company.

 

Meaning of point-to-point encryption

Point-to-point encryption, or P2PE, is a software tool that encrypts your customers’ data from the beginning of the payment process (also called point of capture, when your customer inserts their details into a card reader) all the way until the payment is processed. Your customers’ data is completely safe whenever they make a payment, as it is impossible to revert the encryption back to the original bank details during the payment process.

Encryption is the process of replacing real card details into a “random” numerical code that is used to make payments online. Because your real numbers aren’t shared with any party during the process, it effectively protects you from having your details stolen. Note that there are differences between encryption and tokenisation, mainly in the way that these numerical codes are formed. 

P2PE is used to protect customers' data.

 

Point-to-point encryption (P2PE) versus end-to-end encryption (E2EE)

Both of these designations look similar at a glance, so it is unsurprising that they may cause a lot of confusion even within the Financial Services industry. However, they have small technical differences. Firstly, a P2PE solution can be fully certified by the PCI DSS standard, which will reduce the scope of regulations that merchants need to comply to. E2EE, on the other hand, is not certified, so there are no specific standards to meet. However, these solutions are equally secure.

From a technical standpoint, P2PE encrypts the data from a point-of-sale terminal to the payment processor and avoids using third-parties in the middle. This means that your data goes directly from one point to the other, and it isn’t accessible to other companies. Once it reaches the payment processor, the data is decrypted and sent to the issuing bank to be approved. Merchants have no power over this data and cannot access the unlock key to decodify the data. The payment processor (a third-party) holds responsibility for handling the data and ensuring security.

E2EE also offers encryption from, literally, the end to end of the payment process. However, there could be multiple systems in between. Because there isn’t a specific standard to meet (unlike the P2PE, which has its own rules made by the PCI DSS standard), merchants could unlock this data during the process. Third-parties are not responsible for securing the data either. Instead, merchants hold this responsibility.

P2PE encrypts your customers data and is aligned with PCI requirements.

 

Why should my business have P2PE?

A great benefit of P2PE is that it helps business to comply with the PCI DSS standard and reduces the amount of security efforts that companies need to put in place. This standard is composed by a set of regulations and ensures that any business that stores, processes or transmits card information provides maximum security to their customers. In order to meet the PCI standard, businesses must complete a Self-Assessment Questionnaire (SAQ). However, there is a specific and simpler questionnaire for companies that have P2PE installed. Note that before deploying a P2PE solution, it needs to be PCI-approved.

Besides reducing the PCI-compliance efforts, P2PE offers the payment security that your customers are looking for. As payment fraud rises, customers are increasingly hesitant to share their bank details online. Therefore, it is important that your customers know that you are doing everything you can to protect them and their details by having strong security tools in place.

 

How Imburse can help

Imburse is a cloud-based middleware connecting large enterprises to the payments ecosystem, regardless of their existing IT infrastructure. Through a single connection to Imburse, enterprises can collect or pay out using a variety of payment technologies and providers around the globe.

In a world where consumers payment preferences and technologies are ever-evolving, Imburse works with insurers to future-proof their payment requirements. Regardless of the business area, market, or requirements, Imburse will connect you to your choice of technology and provider.

Reach out to our team below should you want to discuss how Imburse can help you. Our team is happy to show you what our platform can do for your business and offer you a free demo.

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