SFTP vs AS2 vs VAN for EDI: How to Choose the Right Connection

You’ve got EDI transactions to exchange with a trading partner. Three methods come up in almost every conversation: SFTP, AS2, and VAN. They all get the job done. They’re not interchangeable. Here’s what separates them.

The Core Problem They All Solve

EDI transactions need to move from your system to your trading partner’s system (and back) reliably, with confirmation that they arrived. All three methods do this. The differences are in security, cost, complexity, and what the other party will accept.

SFTP — Secure File Transfer Protocol

What it is: You drop files into a folder. The other side picks them up. Simple.

How it works: You (or your trading partner) host an SFTP server. Files are pushed to a designated folder, usually named by partner or transaction type. Each side polls for new files and processes them.

Pros:

• Simple to set up and troubleshoot
• No certificates to manage
• Most ERP and EDI platforms support it natively
• Works well when one party hosts the server

Cons:

• No built-in acknowledgment that the file was received and processed
• You’re responsible for the server if you’re hosting
• Not accepted by all trading partners (some require AS2)

Best for: Smaller trading partners, internal transfers, situations where one party is technically capable of hosting.

AS2 — Applicability Statement 2

What it is: A secure, certificate-based protocol for point-to-point EDI over HTTPS. Think of it as a secure courier that hands the package directly to the recipient and gets a signed receipt.

How it works: Both parties set up AS2 software (Drummond-certified tools are common: Mendelson, OpenAS2, MFT platforms). You exchange SSL certificates. Each transmission is encrypted, signed, and gets an MDN (Message Disposition Notification) — a delivery receipt.

Pros:

• End-to-end encryption and non-repudiation
• Synchronous MDN confirms delivery immediately
• Required by Walmart, Target, and most major retailers at scale
• No third-party in the middle

Cons:

• Certificate management — certificates expire and need renewal
• More setup than SFTP
• Both sides need AS2-capable software

Best for: High-volume retail EDI, any trading partner that requires it (Walmart, Target, Home Depot, etc.).

VAN — Value Added Network

What it is: A third-party network that acts as a clearinghouse. You send your transactions to the VAN; they route them to your partner’s VAN mailbox.

How it works: Both parties connect to the VAN (same or different VANs — most have interconnects). You push transactions to the VAN using your preferred method (SFTP, FTP, AS2 to the VAN). The VAN routes them, stores them, and provides a mailbox for incoming transactions.

Major VANs: SPS Commerce, TrueCommerce, Sterling Commerce (now IBM), Kleinschmidt.

Pros:

• Universal — almost every trading partner accepts VAN
• The VAN handles routing, store, and forward
• Good audit trails and visibility dashboards
• Easy to add new trading partners (connect once, reach many)

Cons:

• Per-transaction or monthly costs — adds up at volume
• Third-party in the critical path
• Slightly slower than direct AS2

Best for: Suppliers just getting started, or anyone needing to connect with many trading partners quickly without building direct connections with each.

How to Decide

Situation	Recommended
Just getting started with EDI	VAN
Trading partner requires AS2	AS2
High volume with Walmart/Target	AS2 (direct)
Internal system integration	SFTP
Many trading partners, low per-partner volume	VAN
Want to control costs at scale	AS2 direct

The Practical Reality

Most suppliers start with a VAN because it’s the fastest path to being compliant with multiple retailers at once. As volume grows, the per-transaction VAN costs start to sting, and direct AS2 connections make financial sense.

The connection method doesn’t change your EDI mapping — the transactions are the same. It only changes how they travel.

If you’re choosing a method or need help setting up a new connection, TebcoForge handles all three. We can configure SFTP servers, set up AS2 with certificate management, and connect to any major VAN.