The most secure P2PE option is to replace existing payment terminals with newer hardware devices offering built-in encryption capabilities. With encryption at the read head, all mag stripe data is encrypted on the hardware terminal itself as soon as the consumer swipes his or her card. No readable data ever leaves the unit, eliminating the risk of theft as it traverses the merchant network. This strategy completely defuses the threat of online attacks.
In the wake of the highly publicized payment card security breaches of the past few years, point-to-point encryption (P2PE) has emerged as a frontrunner in the search for a stronger defense against data compromise. The technology is also being touted as a solution to limit the scope -- and therefore the expense -- of complying with the Payment Card Industry Data Security Standard (PCI DSS).

Yet the ability of P2PE to improve security as well as reduce PCI scope is entirely dependent on the implementation. Both the encryption points selected and the encryption methodologies used will have a direct effect on how well cardholder data is protected between the time it leaves the payment terminal and arrives at its destination.