Choosing the Right EDI Connection: Direct vs. VAN + Transmission Protocol Breakdown

In today’s digital economy, EDI (Electronic Data Interchange) is foundational for seamless B2B transactions across retail, supply chain, logistics, and healthcare. But before deciding which protocol to use, companies must answer a key question:

Should we exchange EDI files through a direct connection or use a VAN (Value-Added Network)?

I have experienced both direct ( AS2 ) and VAN and sharing my experience here.

This article walks through:

1. The difference between Direct vs. VAN EDI connections
2. Available EDI transmission protocols (AS2, SFTP, API, etc.)
3. A deep dive comparison between AS2 and VAN, including how to handle MDN and 997 acknowledgments.

Direct Connection vs. VAN: What's the Difference?

Direct Connection (AS2, SFTP, API, etc.)

In a direct connection, two trading partners exchange data point-to-point, with no third-party network in between.

Benefits:

• Real-time delivery and acknowledgments (e.g., MDN in AS2)
• Full control over security and transmission
• Cost-effective (no per-document fees)

Challenges:

• Requires setup and ongoing IT maintenance
• Partner onboarding takes more effort
• Each new connection may need custom configurations

VAN (Value-Added Network)

A VAN is a third-party provider that handles the exchange, routing, and translation of EDI files on Business behalf.

Benefits:

• Centralized connection to many partners
• Built-in features like data validation, translation, archiving, monitoring
• Reduced internal complexity

Challenges:

• Recurring fees (per doc/line/volume)
• Often not real-time (batch-based delivery)
• Limited visibility into delivery/receipt unless the VAN provides it

Breakdown of Common EDI Connection Protocols

AS2 (Applicability Statement 2)

• Real-time, secure transmission over HTTPS
• Digital signature + encryption + MDN acknowledgment
• Preferred by large retailers

VAN (Managed EDI Network)

• Intermediary that handles routing, archiving, and delivery
• Simplifies integration with multiple partners
• No direct MDNs—uses 997/999 functional acknowledgments

SFTP / FTPS

• Secure file transfer protocols
• Good for simple EDI push/pull scenarios
• No real-time response or functional tracking built-in

OFTP2

• Widely used in European automotive industry
• Supports encryption, digital signatures, and compression

AS4

• Web-services-based successor to AS2
• Used in public sector
• Supports modern encryption and B2B messaging standards

MQ (Message Queues like IBM MQ)

• Used for high-throughput internal or B2B messaging
• Ideal for batch jobs and financial transactions

API-based EDI (REST/SOAP)

• Real-time and flexible
• Easy integration with cloud apps
• Great for modern composable commerce and digital transformation

AS2 vs. VAN – Deep Comparison

MDN vs. 997: Ensuring Acknowledgment & Compliance

In AS2, you receive an MDN (Message Disposition Notification), which:

• Confirms the file was received and decrypted
• Proves non-repudiation (important for compliance)
• Is real-time (sent immediately upon receipt)

In VAN, instead of MDNs, you rely on:

997 or 999 Functional Acknowledgments

• Sent by the trading partner's EDI system
• Confirm that the file was syntactically correct and accepted
• Not real-time (can take minutes or hours)

Mitigating Risks Without MDN in VAN

Choosing between direct and VAN connections isn’t just about tech — it’s about business alignment. If your business demands real-time visibility, tight security, and full control, AS2 is ideal. If you prioritize ease of scaling and partner diversity, a VAN may be your best option.