point to point encryption

P2PE (Point-to-Point Encryption) Definition

Cardholder data is sensitive and prone to data breaches and hacks. In simpler terms, businesses accepting credit cards should be extra cautious as far as anti-fraud processes and data security are concerned. 

Individuals involved in the process of PCI DSS Compliance at any business will be interested in P2PE or Point-to-Point Encryption. P2PE is regarded as an encryption method offering the best-ever protection for the payment information of end customers. 

What is P2PE or Point-to-Point Encryption?

P2PE is a method or standard of encryption put forth by the Payment Card Industry Security Standards Council. The standard assumes that the cardholder information is encrypted instantly after the utilization of the card with the Point of Sale or POS terminal of the merchant. Moreover, it also stipulates that the information is not decrypted until the same has been processed by the respective payment processor. 

The standard is achieved by P2PE or Point-to-Point Encryption solutions. These are regarded as a comprehensive set of services offered by specialist providers featuring all integral devices and software needed to fulfill the specifications of P2PE compliance.

What is the PCI-validated P2PE Solution?

You should note that not all P2PE solutions will receive validation from the Payment Card Industry Security Standards Council. For any P2PE solution to ensure validation (to confirm that it is capable of meeting rigorous controls as defined in the PCI P2PE Standard), it is mandatory to undergo in-depth audit as well as assessment from a professional and P2PE QSA or Qualified Security Assessor. 

Upon this validation, the P2PE solution will be brought forth to the respective PCI Council for receiving approval. Therefore, what should the PCI-validated P2PE solution feature? As per the reports of the PCI Council, some requirements for PCI P2PE that are expected to be fulfilled are:

  • P2PE application at the respective POI
  • Card information encryption at the respective payment terminal or POI
  • Secure management of decryption as well as encryption devices
  • Secure management of decrypted data and description environment
  • Utilization of advanced encryption mechanisms along with cryptographic core operations

What is the Working of P2PE Transactions?

Typically, P2PE is responsible for encrypting credit or debit card information as soon as the same is derived from the respective payment processor. To ensure the same, P2PE makes use of an advanced algorithm that converts available information into a code that remains unreadable. The code is eventually transferred to the payment processor. Here, the code gets decrypted with the help of a secure key.

As the process of decryption takes place electronically, the merchant will never come into contact with sensitive financial information of the customers. Therefore, the process renders sensitive financial information while making it invisible. 

Understanding the Difference Between P2PE and E2EE

While both E2EE (End-to-end encryption) and P2PE methods tend to be similar, there happens to be a major point of difference. The E2EE solutions are not known to meet the specific standards of the PCI Council. It is primarily because there are several systems between the processing point and the POI. This tends to increase the overall chance of a breach or a hack. 

Contrastingly, P2PE solutions are responsible for transferring data directly without the involvement of any systems in between. It is also important to note that P2PE tends to be assessable. Moreover, there is not the involvement of any standards in association with encryption solutions that are regarded as end-to-end.

Understanding P2PE Solutions & PCI DSS Compliance

Let us assume that you make use of P2PE solutions meeting the respective specifications for PCI P2PE. In this, case, you will be out of scope for the fulfillment of PCI DSS Compliance. In simpler words, compliance is the responsibility of the P2PE provider. In an unfortunate event of data breach, the provider will be held accountable for -not the users. 

This implies that there is no need to worry about prospective penalties in association with PCI DSS -including suspension of the capability of receiving credit card payments, fees, and replacement costs for credit cards.

Point to Point Payment Solutions

It is advised to go forward with the help of Point-to-Point Payment solutions if you are a professional merchant processing card payments. This could be in the form of online payments in which the user will input the respective card details. Otherwise, it could be in the form of offline transactions with the help of a dedicated POS or Point of Sale machine. This takes place when the customer is either present or you are taking payments through the phone. If you are processing any type of card details as an integral part of the transaction, P2PE instantly converts sensitive information to a type of indecipherable code that is ready to be transmitted to the payment processor.

A dedicated P2P (Point to Point) payment solution provider serves to be a third-party making use of a combination of applications, processes, and secure devices to ensure the encryption of card-relevant data. The solution providers are responsible for the design of the solution as well as its security. You should look out for solution providers claiming that they are PCI-validated. It is because it is not the case at all times. They are expected to be validated by QSA or Quality Security Assessors for P2PE or PA-QSA (Payment Application QSA) for P2PE.

A reliable P2P or Point to Point solution provider will help in the navigation of the P2PE scope. The provider will also help in offering advice on an effective strategy for meeting diverse security needs. They are responsible for managing the solution with the help of design as well as roll-out while being there for offering relevant advice along with troubleshooting solutions. 

Benefits of P2PE Solutions

There is no denying the fact that P2PE Standards that are PCI-validated will help in setting the benchmark in the existing industry. Some of the additional benefits to look out for are:

  • A highly secure encryption method
  • Decryption of data does not take place between the payment processing environment and payment interaction. Therefore, there is no need to worry about data security & protection. You can continue focusing on what you are doing the best in the form of a business enterprise.
  • There is reduced burden with compliance as you apply for relevant PCI certification.
  • Most of the specifications for PCI compliances tend to be negated upon the integration of the P2PE system. This will make the overall transactions quite simpler and less expensive. 
  • You can be assured of improved protection for your overall customers -fostering a relationship of trust.
  • Rapid conversion -particularly online, takes place while relying on two core components -trust and price. When you make use of secure methods to protect the data of customers, they will end up trusting you even more.
  • You can deliver proof of card to the respective issuers. This offers the assurance that you are taking a responsible approach to ensure reliable data protection.
  • The process mitigates the overall liability for potential data breaches while lowering the risks of financial institutions and banks to refuse transactions or limit further transactions from the business enterprise.
  • Reduced risks of frauds and hacking
  • PCI Standard P2PE transactions are capable of virtually eliminating data breaches with the help of relevant payment card information.

Purpose of the PCI P2PE Standard

When you realize the existence of ongoing encryption solutions along with the improving need for guidance on the right implementation, PCI SSC will offer a structure for advanced encryption solutions. It will take into account the overall impact of transaction encryption within the standard framework. 

The PCI-validated P2PE solutions have determined the risks that can be completely addressed towards protecting data along with related controls that can be neglected reasonably. Including:

  • Encryption should be robust towards submitting data safely without decryption security.
  • Acceptable practices for key management should be utilized for protecting the private key from any type of compromise. 
  • During the encryption stage, effective controls should be implemented to ensure the protection of secret encryption keys.
  • The overall integrity of the entire decryption environment should remain free from potential security vulnerabilities.

Conclusion

There are some unique methods of data encryption that could make it confusing when you are only starting out. However, if you are looking for a system that remains PCI-validated and the one complying with the PCI compliance standards, make sure that you choose a dedicated solution meeting the standards as put forth by the PCI Security Standards Council. It will help you save time & money in the long run if you are prone to data breaches or online frauds.