Here’s Why Your Business Needs End-to-End Encryption

credit card security

If you run a small to mid-sized business, you’re at risk of a data breach. According to the US Securities and Exchange Commission (SEC), 43 to 60 percent of cyber attacks are targeted towards small and mid-size businesses. If that wasn’t worrisome enough, a study by the U.S. National Cyber Security Alliance found that 60 percent of all small businesses that suffer a cyber attack go out of business within six months of the breach. Recovering from a breach takes time and money, and often customers are slow to trust a business again after their data has been compromised.

While these statistics may seem harrowing, there are certain practical steps that merchants can take in order to protect themselves from data breaches and cyber attacks, like working with products and partners that use End-to-End Encryption (E2EE).

At first glance, E2EE may seem like yet another acronym within an industry that already feels crowded with them, but understanding E2EE is essential to protecting your business.

So, what exactly is end-to-end encryption?

We’re glad you asked. End-to-end encryption (E2EE) is a method of secure communication that prevents third-parties from accessing data while it’s being transferred from one end system or device to another. In E2EE, the data is encrypted on the sender’s system or device and only the recipient is able to decrypt it.

In other words, when you’re processing credit cards and handling sensitive financial data, E2EE ensures that it doesn’t fall into the wrong hands, therefore creating a security breach.

How does it work?

Think of the process of E2EE a bit like two interlocking puzzle pieces. When transferring data, the sender uses an encryption key which essentially scrambles the data. In order to receive the information and unscramble it, the recipient needs to have the corresponding key.

How this works for credit card processing: when a customer uses a credit card to make a purchase, their information is encrypted. It remains encrypted until the data arrives at the payment processor or acquirer who is then able to unscramble or decrypt it.

What are the benefits of E2EE?

Along with everything mentioned above, another huge benefit of E2EE is that you don’t really have to think about it. It’s built right into hardware and software, which means you there’s nothing to initiate or add-on. Your customer’s data is protected — simple as that.

The downside to E2EE is that it protects data while it’s being transmitted from the customer to the payment processor, but unfortunately, it can’t protect either of those endpoints. For example, end-end-end encryption isn’t going to protect data if for some reason it’s hacked on either end. To counteract this, many payment processors have started using Two-Factor Authentication.

Two-Factor Authentication (also known as 2FA or multi-factor authentication) requires the user to verify two separate variables, such as a password plus another piece of info before they’re able to make any sensitive changes on their account. For example, if you try to link a new bank account or reset your account password, 2FA will prompt you to enter the info above in order to verify your identity.

If you’re operating as a merchant, it’s imperative that you keep customer information such as passwords, credit card numbers and other personal data such as their home address and birthday completely secure. Using products that involve end-to-end encryption is one way to reduce the risk of a costly data breach.