If your business accepts card payments, it’s your responsibility to keep your customers’ private data safe.
Encryption is a powerful tool that businesses can have to achieve this. Depending on their business size and processing volume, there are several data security measures that merchants can use to safeguard their businesses and customers against data breaches. One of them is what’s known as end-to-end encryption (E2EE).
In this article, we delve into what E2EE is, how it works in the context of payment card data, and the key differences between E2EE and point-to-point encryption (P2PE). This way, you can better understand which data encryption option fits your business needs best.
What is E2EE?
In the world of payments, E2EE ensures that private cardholder data (e.g., credit/debit card numbers) being transmitted during the payment flow is encrypted and only accessed by the sender and the authorised recipient. One of the key goals of E2EE is to prevent fraudulent activities through unauthorised access to the data from one source to another.
The ‘end to end’ component ensures the private account number (PAN) and other sensitive cardholder information are encrypted and securely transmitted from one point to another. The ‘encryption’ process is performed by the payment gateway after the customer initiates the transaction, while it is decrypted and decoded when it reaches the acquirer.
How does E2EE work?
At its basic level, E2EE uses cryptography algorithms to generate the codes that keep the cardholder's sensitive information unreadable. To transmit the data, the sender uses an encryption key that scrambles the information. Only a recipient with the corresponding key can unscramble the data. In other words, when the data is transferred, only the acquirer can decrypt it with a key.
E2EE can be utilised in both point of sale (POS) payments and online payments. In terms of POS transactions, E2EE can be deployed to safeguard the payment card data from the moment it is captured at the merchant's terminal for POS transaction or at the checkout page of an eCommerce website all the way through the intended destination – i.e., the acquirer.
Below we present a typical transaction that's a performed on a POS terminal with the use of E2EE.
The main objective of E2EE is to ensure that sensitive payment details remain encrypted and secure regardless of the payment channel. However, it should be noted that the implementation of E2EE can differ depending on the payment systems, providers, and technologies involved. Businesses should liaise with their payment service provider to make sure the right E2EE measures are set in place.
Moreover, to ensure that E2EE can provide the maximum and most efficient level of data security for payments against fraud, it should be leveraged alongside a business’ fraud and risk management strategy. This can involve fraud prevention tools, real-time fraud monitoring and expert advisory from an experienced payment service provider (more of this below).
Benefits of E2EE
E2EE provides several benefits that ensures safe payment processing and customer satisfaction. This may include, yet are not limited to, the following:
- Enhanced data security – E2EE's role is to make sure that cardholder data is safely transferred during the transaction process to mitigate the risk of data breaches, unauthorised access, and interception of payment information. Even if a fraudster gets access to the encrypted information, they would be unable to decipher it without the proper decryption keys.
- Brand trust through protection of customer privacy – E2EE ensures the privacy of customers by preventing any unintended sources, including service providers and intermediaries, from accessing or viewing their payment data. This helps build trust between customers and merchants or payment processors, as customers have the assurance that their personal and financial information is safeguarded.
- Increased conversions and revenue – Customers are more likely to share their personal and financial information if they know the merchant has robust security solutions in place. Not only can this maximise the sales volumes and profitability of a business, but it can also encourage repeat custom.
E2EE vs P2PE – What’s the difference
E2EE and P2PE are security standards and encryption methods that businesses can deploy to protect cardholder data against breaches and tampering with devices. This means that they both encrypt sensitive payment card data into unintelligible text from the moment the customer shares it at checkout until it gets to the acquirer.
However, their fundamental difference lies in the type of payments each security standard supports. As explained previously, E2EE covers the scope of both card present and card not present transactions whereas P2PE is only applicable to card present payments. There is also variability in the security regulations and compliance each of them abides by when processing data.
Security rules
E2EE doesn’t need to follow specific and thorough set of rules as P2PE does, as the latter is developed by the Payment Card Institute’s Security Standards Council (PCI SSC) and meets a key element of the PCI’s Data Security Standards (PCI DSS) about handling cardholder data.
Unlike E2EE, P2PE systems require annual inventory inspections and regular site checks by formal assessors to ensure POS terminals and technology comply with PCI requirements.
Ways of encrypting
Although E2EE encrypts the payment process from end to end, businesses are allowed keep the keys and access the data during the process. This suggests that merchants need to ensure the data is processed securely.
By contrast, P2PE solutions connect card terminals directly with the system that processes payments. In this case, the merchant has no control over the customer's sensitive information or the key to decrypt it because they don't store or transmit cardholder data in their servers. It is only the acquirer who holds the encryption keys and is responsible for safely passing the payment data onto the issuer for transaction authorisation.
Liability
The E2EE standard offers more flexibility to merchants, with their business being held accountable for all potential penalties if the data gets lost, leaked or stolen. This is because the merchant can hold the keys and has the leeway to choose how to encrypt data. On the other hand, with a P2PE setup, the liability shifts to the assessor who reviews security standards at each stage to ensure a safe process.
Is E2EE right for my business and how emerchantpay can help?
In any case, your choice of a data encryption security standard for in-store and/or online payments should be measured based on the size of your business, your infrastructure for handling data, and the number of card transactions you process.
As an experienced and PCI Level 1 compliant payment service provider, emerchantpay can equip you with advanced fraud and risk management solutions critical to monitoring your transactions. This will enable you to be reassured that emerchantpay applies encryption and all the necessary security measures to process transactions with heightened security and in a fully compliant way with PCI DSS requirements. Through data-driven insights and expert advisory, our Risk Analyst will help identify any points of weakness to protect your revenue. This way, you’ll be better positioned to design a secure and engaging payment experience for your customers.
If you’re looking for a payment service provider to help you enhance your data security, speak with our team of experts today.