Electronic Data Interchange (EDI) streamlines digital document exchanges, allowing for accurate, near-instant information transfers — purchase orders, invoices, and more — between trading partners. At the core of this revolutionary tech are EDI communication protocols. Without them, Electronic Data Interchange wouldn't be possible.
In this guide, we’ll explore nine common EDI communication protocols and how they enable seamless data exchanges for countless businesses in multiple industries around the world.
What Are EDI Communication Protocols?
EDI communication protocols are standardized rules that enable systems to exchange data. For it to work properly, both business partners' computer systems must use the same Electronic Data Interchange protocol.
While Electronic Data Interchange formats define how data is structured, EDI protocols set the rules for how that data is securely transmitted — similar to how the postal service determines how letters and packages are delivered safely and reliably. Think of the EDI format as the address on the package, while the EDI protocol ensures it reaches the recipient safely and on time.
The protocol not only dictates the security level of an EDI messaging system; it also defines the software and hardware that are necessary for smooth, reliable data transfers.
9 Common EDI Communication Protocols Explained
EDI communication protocols vary, with some tailored to meet the unique needs of specific industries. Here are some of the most commonly used protocols across various sectors.
AS2
The AS2 protocol was developed specifically for B2B document exchange and has become one of the go-to EDI transmission protocols for point-to-point connections across industries. It uses HTTPS to securely transmit Electronic Data Interchange messages with real-time acknowledgment, ensuring both security and seamless communication.
Pros of AS2
More cost-effective than traditional EDI protocols
Uses encryption and digital signatures for additional security
Cons of AS2
Data size is limited to 2GB
Requires significant upfront investment to set up
AS3
The AS3 protocol is designed for secure and reliable messaging over FTP (File Transfer Protocol), a standard network protocol used to transfer files between systems over a TCP/IP (Transmission Control Protocol/Internet Protocol) network.
Unlike AS2, which uses a peer-to-peer model, AS3 operates on a client/server model similar to FTP. It incorporates receipt notifications and a push-and-pull approach, meaning the client doesn’t need to continually check for messages. This makes AS3 an ideal choice for sectors like banking and financial institutions, where secure and efficient messaging is especially important.
Pros of AS3
Works with existing FTP infrastructure
Uses MDN ((Message Disposition Notification) for message delivery
Uses digital signatures and encryption for security
Cons of AS3
Both parties need compatible systems
Requires a significant upfront investment
AS4
The AS4 EDI protocol uses web services, a set of standards and protocols that enable different computer systems, often running on different platforms, to communicate over the internet. These web services allow businesses to securely and efficiently exchange data, even when their systems are not natively compatible, making AS4 an effective tool for cross-platform integration.
Although developers are still refining it, AS4 is already in use, offering businesses a simple solution to connect their internal systems — the software they use within their company — with external partners. This facilitates seamless data sharing while ensuring businesses maintain flexibility and scalability in their technology.
Pros of AS4
Offers interoperability with many services
Easily integrates with other SOA systems
Is highly scalable
Cons of AS4
Requires a substantial initial investment
Complicated to set up
Value-Added Network (VAN)
A VAN is a third-party service that helps EDI connection and transmission between trading partners. VANs provide the necessary tools and support for these transactions, offering strong security and proof that messages were delivered.
Pros of VANs
Simplifies the onboarding process
Offers a wide range of security protocols
Provides reliable and stable communication infrastructure
Cons of VANs
Ongoing costs can accumulate over time
Users have limited control over the process
EBMS (Electronic Business Message Service)
The EBMS communication protocol exchanges EDI files based on XML (Extensible Markup Language), a set of open standards that enables businesses to exchange data over the internet. As a protocol-neutral system, EBMS is compatible with various platforms and provides features like message routing, reliability, and security.
Pros of EBMS
Supports a broad range of message formats
Provides strong security via end-to-end encryption
Scalable for large B2B data exchanges
Cons of EBMS
Steep learning curve for beginners
Cloud/Web EDI
Cloud/web EDI is a communication protocol that connects trading partners’ Electronic Data Interchange systems via the internet. It’s easy to implement since it doesn’t require installing hardware or managing complex systems, making it an ideal solution for small to medium-sized businesses (SMBs) with limited resources and personnel.
Pros of Cloud/Web EDI
Enables real-time transactions
Simple to use, with minimal training needed
Scalable to fit businesses’ evolving needs
Cons of Cloud/Web EDI
Requires ongoing subscription costs
REST API
Often used alongside web services, REST API allows businesses to customize their Electronic Data Interchange protocols. It offers a modern and flexible way for trading partners to exchange information. One of its standout features is its ability to integrate easily with other systems, such as ERPs, CRMs, and business applications, enabling fast and accurate transactions.
Pros of REST API
Caches client responses for improved performance
Supports layered system architecture
Highly scalable
Cons of REST API
Relies heavily on HTTP
Lacks a standardized format or structure
OFTP (Odette File Transfer Protocol)
OFTP was developed to provide the European automotive industry with a standardized communication method. It remains one of the most widely used protocols for EDI document exchange. OFTP is an efficient protocol that supports large file transmissions and includes features like data compression, security, and file restart. It enables businesses to communicate through point-to-point connections.
Pros of OFTP
Cost-effective with low overhead
Supports file compression and batch transfers
Encrypts data during transmission for added security
Cons of OFTP
Primarily used within the automotive industry
Can be blocked by firewalls and other security systems
OFTP 2.0
OFTP 2.0 is an updated version of the OFTP standard. Unlike its predecessor, OFTP 2.0 offers enhanced features such as file encryption, digital certificate exchange, and data compression. It also supports larger file sizes and additional characters for non-Roman writing systems like Chinese and Japanese.
Pros of OFTP 2.0
Supports advanced encryption algorithms
Handles a wider range of file types
Based on international standards
Cons of OFTP 2.0
Requires time to learn for new users
May have integration challenges with existing technologies
Get Expert Guidance on EDI Communication Protocols
Ready to modernize the way you send and receive purchase orders, invoices, and other important documents? Contact an EDI expert today to discover the ideal communication protocol for your business.