Consider the process of information exchange between two enterprises. One is an online books-seller and the other is a publisher. When the books-seller wants to purchase books, it submits a purchase order to the publisher. At the publisher's end, the sales department receives this order, processes it, and forwards it to the accounts department. The two enterprises exchange information in the form of XML documents. Since some portion of the document needs to be secure and the rest can be sent insecurely, XML encryption is the natural approach for applying security to distinct portions of the document.

According to the books-seller's security policy, the payment information will only be revealed to the accounts department. The sales department will need to extract only the name of the book, its item ID and the quantity ordered; because this is insensitive information it can remain insecure. The accounts department will need to decrypt the payment information in the purchase order using a pre-exchanged secret key. (Note that XML Encryption is only about encryption and decryption of structured information and does not dictate any particular method of key exchange.) Mapping this policy, XML Encryption facilitates the concealment of payment information in the sales department and its disclosure in the accounts department.

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