Point to Point Encryption (P2PE) and Tokenization

The case for secure payments for your business

February 15, 2017 No Comments

With the continued rise in data security breaches, merchants are on the lookout for a secure payments solution that will shield them from liability and fraud. One solution for stands out as the “New Standard” for card data acceptance. The process of Point to Point Encryption (P2PE), encrypting the card data at the point of sale, and tokenization, which replaces the card data with an irreversible credit card “equivalent”, is becoming widely acknowledged as the one way to protect your business.  

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As consumers, we’ve become numb to data security breaches. Think Target, Home Depot and most recently, Arby’s. Aside from minor inconveniences of disputing credit card transactions and having new cards issued, consumers carry very little, if any, liability for fraudulent transactions.

What impact do data security breaches have on businesses?

When data security breaches occur, the targeted business must deploy a significant amount of resources to first acknowledge the breach, research the origin, communicate with effected customers and enable an action plan for dealing with the infraction. This all comes before loss in reputation, a decline in sales and potential fines from the card brands.

A recent study by IBM shows the cost of a Data Security Breach to hit $4 million

No matter how big or small your company, chances are you are not prepared for the expense of a card data breach if it were to happen. So, what can you do to protect yourself and offer more secure payments solutions for your customers?

Let’s ask the professionals: The PCI (Payment Card Industry) Security Standards Council

According to the Payment Card Industry Data Security Standards (PCI-DSS), the most effective method for secure payments and protecting cardholder data is to implement a PCI-Certified Point to Point Encryption v2 method for capturing card data. P2PE devices are available for card present and card not present environments.

A point-to-point encryption solution cryptographically protects account data from the point where a merchant accepts the payment card to the secure point of decryption. By using this methodology, account data (cardholder data and sensitive authentication data) is unreadable until it reaches the secure decryption environment, which makes it less valuable if the data is stolen in a breach.

Using a PCI Validated solution provides the strongest encryption protection for businesses, and significantly reduces the scope of PCI compliance.

The icing on the cake: Tokenization

Tokenization, defined as "Substituting a sensitive data element (the credit card number) with a non-sensitive equivalent" enables any merchant to safely store credit card data for any future use. This may be stored for recurring billing, subscription based payments, remaining balances or future refunds. Whatever the use case, the Tokens are irreversible, so they are specific only to the merchant that originally generated it, and they are impossible to decrypt.

The process of Point to Point Encryption (P2PE), encrypting the card data at the point of sale, and tokenization, which replaces the card data with an irreversible credit card “equivalent”, are positioned to be the new standard in payment acceptance.

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Tags: Secure Payments, Healthcare Payment Solutions

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