The PCI Point-to-Point Encryption (P2PE) standard is designed to protect cardholder data during transactions by encrypting sensitive data from the point of interaction (such as a payment terminal) to the point of decryption. This ensures that card data is not exposed to potential attackers, even if the merchant's systems are compromised. P2PE is a critical part of the broader PCI DSS compliance requirements and helps merchants reduce the scope of PCI compliance audits.