Also called: Data encryption, Encryption algorithm, Encryption key
What encryption is
Encryption changes readable information, called plaintext, into scrambled ciphertext using an algorithm and a key. Someone with the matching decryption key can restore the original data. In a card payment, the protected information can include a card number and expiration date.
With symmetric encryption, the same secret key locks and unlocks the data. With asymmetric encryption, a public key encrypts it and a different, private key decrypts it. Either way, whoever controls the keys controls access to the protected information.
Encryption helps keep stolen payment data unreadable, but key control determines who can read it.
How encryption works in payments
Encryption can protect the communication path or the payment data itself. HTTPS uses TLS to encrypt data moving between a customer’s browser and a website. This protects the connection, but the data can be readable at either endpoint when the connection is open.
End-to-end encryption protects the payment data from the point it is captured until it reaches the party that can decrypt it. For example, a payment page can encrypt a card number and CVV before they pass through the business’s application. The receiving system needs the key to process the payment.
What it means for your business
Encryption reduces the chance that stolen or intercepted card data will be readable. It does not prevent every breach: someone who obtains a decryption key, or accesses data after it has been decrypted, can still expose the information. Key storage, access, distribution, and replacement are part of the protection.
Encryption does not lower interchange, network assessments, or your processor’s markup. There is no standard card-processing fee for encryption itself, though a provider can price a security service separately. You will not find a universal encryption line on your processing statement.
Encryption and PCI DSS
As of 2026, PCI DSS v4.0.1 is the current standard. It requires safeguards for cardholder data, including protection when that data travels over public networks. Encryption is one control, not a substitute for access controls, monitoring, or other PCI DSS requirements.
Encryption alone does not take your business out of PCI scope. For e-commerce businesses, the requirements that became mandatory on March 31, 2025 include payment-page script controls numbered 6.4.3 and 11.6.1. A payment service that encrypts data in a customer’s browser can reduce exposure, but you still need to validate your applicable PCI DSS requirements.
Where encryption stops
Encryption and tokenization solve different problems. Encryption lets an authorized party recover the original data with a key. Tokenization replaces the card number with a substitute value, which can reduce how much card data your business stores. Neither control makes weak passwords or excessive employee access safe.
What you can actually change
- Limit stored card data. Use a payment service to handle card details where practical, and avoid keeping card numbers on local computers or servers. Less stored card data means less information to protect.
- Ask where encryption ends. Find out whether card data is encrypted only while moving between systems or from the payment device or page through to the processor. Confirm which party holds the decryption keys.
- Review your PCI controls. Confirm your PCI DSS validation covers your actual payment channels and stored data. For e-commerce, review payment-page script controls 6.4.3 and 11.6.1, mandatory since March 31, 2025.
Frequently asked questions
Does encryption reduce credit card processing fees?
No. Encryption is a security control and does not change interchange, network assessments, or processor markup. A provider can charge separately for a security service, but there is no standard encryption fee or universal statement line.
Is encrypted card data safe to store?
Encryption makes stored data harder to read without the decryption key, but it does not remove the need to protect that key or restrict access. Store only the card data you need, and confirm your storage practices meet your PCI DSS requirements.
Does encryption make my business PCI compliant?
No. Encryption is one safeguard within PCI DSS, not proof that you meet every requirement. Your obligations depend on how your business accepts, processes, transmits, and stores cardholder data.