Home > Knowledge Base > EDI via AS2, FTP & VAN?

EDI via AS2, FTP & VAN? Which one is best for EDI Communication?


  • On the top is AS2 which is one of the best communication methods with real time data push and updates, is affordable and brings with it the highest level of security
    • Next on the list is FTP which is hosted on your trading partners(s) servers and is the most commonly-used methods for EDI communication

    Here’s a video that explains the difference between AS2, FTP and VAN

    What is AS2?

    Applicability Statement 2 is the secure peer-to-peer, point-to-point communication between two companies over the internet (live data push). It is one of the most widely accepted EDI protocol across industries.

    How does AS2 Work?

    AS2 connection is established between two computers (a server and a client). AS2 creates an “envelope” in order to transmit data securely using digital certificates and encryption. The selected data is then transmitted between these two systems-one is the sender and the other is the receiver.

    How to Setup an AS2 Connection?

    You’ll need the following to setup an AS2 connection:

    • One AS2 Certificate per participant: This is for signing and encrypting your data
    • Your AS2 information and identifier: This is the identifier you’ll give your trading partner to recognize you when you send information
    • Your trading partner’s information and identifier
    • Agreed upon type of MDN (Message Disposition Notification): This is an electronic acknowledgement sent to the sender via AS2 after a message has been sent by the sender.

    There are 3 types: Synchronous (they want the MDNs in the same connection that the data was sent in), Asynchronous (they want the MDNs to come back in a different connection) or No MDNs

    Note: There could be other requirements needed too depending on the system you are using

      Your AS2<—–>Your Trading Partner’s AS2

    1. You start by creating an AS2 certificate for your organization which needs to be self-signed and represents the certificate for your organization (Sender)
      • Create your company information and your AS2 identifier (could be a combination of different numbers, company name, DUNS number etc.) that you’ll share with your trading partner
        • Now give exchange your AS2 identifier, AS2 Certificate and MDN and get your trading partner’s identifier, certificate and MDN
          • Once you receive this information from your trading partner, create their company profile in your system by adding the above information
            • Create a relationship between both the organizations as instructed by the system you are using for AS2

            Generally, whenever a file is placed in the outbound folder the AS2 send process will get started. When your partner sends AS2 data to you, it ends up in the inbound folder.

            What is FTP?

            The File Transfer Protocol is a communication protocol used for the transfer of computer files from a server to a client on a computer network. You have to upload the files on your side and the recipient downloads the files on their side (could be multiple times a day)

            FTP was initially used to transfer files internally within an organization and still is. However, FTP alone cannot provide enough security for the data between organizations and also don’t provide any message management for your transactions. So, there are other added protocols that are slightly better for EDI communication.

            There are 3 types of FTP Protocols

            1. FTP with VPN (Virtual Private Network): There is an extra layer of security when you add a VPN to FTP. However, this still may not be the best option because it doesn’t provide assurance that the sender of information is provided with proof of delivery and the recipient is provided with proof of the sender’s identity. There were compatibility issues as well that were found between two organizations if they were not using the same vendor.
              • SFTP (Secure File Transfer Protocol) and FTPS (File Transfer Protocol Secure): They both provide an additional layer of security along with data compression enabling faster file transfers.
                • MFT (Managed File Transfer) or Secure File Transfer with Encryption
                  If your organization needs to move large volumes of sensitive data on a regular basis, you should consider this solution. MFT goes well beyond SFTP and FTPS to provide file encryption at rest and during transfer, robust management and user access capabilities, workflow automation and cyber security.

                How to Setup an FTP Connection for EDI?

                Setting up an FTP connection is fairly easy. Some common steps are:

                1. You create your EDI profile for the FTP protocol
                2. You provide the host name or IP address of the FTP server
                3. Enter the login name of the FTP server that has been provided by the admin
                4. Enter the password provided by the admin
                5. Enter the name of the directory (if it exists) the FTP admin gives you to put your files in

                What is VAN?

                Value Added Network is a third party that enables communication between both the parties. It acts as an intermediary between 2 parties sharing standards based on proprietary data.

                VAN is a simple concept. You’ll be provided with a mailbox that can be secured with an encryption by an EDI VAN provider you choose. You’ll send and receive documents from and into the mailbox. You check the mailbox periodically to retrieve your documents. Most EDI VAN providers offer an alerting service that will inform you when messages have been sent successfully and notifies your trading partners that a new message is waiting.

                Read next

                Take a look at an EDI mapping guideline example and know how to read your trading partner’s too

                Continue Reading

                How Does EDI Facilitate Electronic Transactions

                How Does EDI Facilitate Electronic Transactions? Basics of EDI

                Learn how EDI facilitates the transmission of EDI documents between computer systems and the benefits of EDI in business with an example.

                How and When to Get Started with EDI

                How and When to Get Started with EDI

                Learn when and how you should start doing EDI. Whether you are a start-up or a small business, are you ready to evaluate step-by-step if you should go ahead with a new EDI setup and implementation?

                What Does EDI Stand for in Business

                What is EDi? The Business Aspect

                Here is a Complete Guide to EDI- EDI stands for electronic data interchange which is an electronic exchange of business documents between two or more entities in a defined standard format.Incorporating EDI as a part of your overall IT stack replaces paper completely and makes your order-to-cash cycle seamless. Learn about the applications of EDI in business