SFTP vs AS2 vs VAN: Which EDI Connection Does Your Retailer Actually Require?

SFTP vs AS2 vs VAN: Which EDI Connection Does Your Retailer Actually Require?

When a retailer sends you an EDI onboarding packet, buried inside the spec sheet is a connection requirement that most small suppliers treat as an afterthought — right up until setup falls apart or a chargeback hits. Whether you need SFTP, AS2, or a VAN depends entirely on who’s buying from you, and getting it wrong costs real money. Here’s how to read the room before you sign a contract with an EDI provider charging you $400/month for infrastructure you may not need.

What These Three Protocols Actually Are

VAN (Value-Added Network) is the old-school option. A VAN is essentially a shared mailbox service — your EDI files go into the VAN, the retailer’s EDI files come out. Think of it as a post office that only handles EDI. VANs like SPS Commerce and TrueCommerce built entire businesses around charging per-kilocharacter (yes, by the kilobyte of data) to relay these files. A small supplier sending 200 purchase orders a year can pay $150–$300/month just in VAN relay fees on top of their platform subscription.

AS2 (Applicability Statement 2) is a direct, encrypted HTTPS-based protocol. Your system connects point-to-point with the retailer’s system. No middleman. Walmart popularized AS2 back in the early 2000s as a way to cut VAN costs for their side of the equation. AS2 requires a certificate exchange and proper endpoint configuration, but once it’s running it’s reliable and there are no per-transaction relay fees.

SFTP (Secure File Transfer Protocol) is the simplest of the three. Drop a file into a secure folder, the retailer picks it up. Many regional retailers and mid-size grocers use SFTP precisely because it’s easy to implement and maintain. It’s not real-time like AS2, but for suppliers on daily batch cycles it’s entirely sufficient.

What Walmart, Target, and Kroger Actually Require

Walmart requires AS2 for direct EDI connections. Their spec mandates AS2 for all transaction sets — 850 purchase orders, 856 advance ship notices, 810 invoices, and 997 functional acknowledgments. If you’re a very small supplier going through Retail Link, Walmart has historically allowed VAN connections via approved partners, but AS2 is the expectation for anyone doing meaningful volume. The critical failure point here is the 856 ASN — Walmart’s chargeback rate for late or malformed ASNs is $200 or 2% of the PO value. Your connection method won’t save a bad 856, but a VAN with slow relay times can cause timing failures that a direct AS2 connection wouldn’t.

Target supports both AS2 and VAN connections. Target’s Partner Online portal (POL) is reasonably well-documented, and their EDI team will tell you upfront which they prefer for your volume tier. For most small suppliers, Target accepts VAN routing through their approved network. The compliance trap with Target isn’t the connection type — it’s the 856 timing window (must transmit before the carrier picks up the shipment) and GS1-128 label requirements that trip up first-timers.

Kroger primarily uses VAN connections and their own internal EDI platform. If you’ve read our previous post on Kroger EDI compliance for small suppliers, you know that Kroger’s compliance program has gotten more aggressive. Their preferred VANs are documented in the supplier handbook, and deviating from the approved list creates routing failures that won’t be obvious until acknowledgments stop arriving.

The Cost Reality of VAN vs. Direct Connection

Here’s where enterprise EDI vendors benefit from your confusion. SPS Commerce and TrueCommerce bundle VAN relay fees into subscription pricing that looks flat until you read the fine print. A supplier doing $500K/year with Walmart might generate 15,000–20,000 kilocharacters of EDI data per month. At $0.01–0.02/kilocharacter (a common VAN rate), that’s $150–$400/month in relay fees alone — fees that disappear with a properly configured AS2 connection.

For a supplier working with multiple retailers, the math often looks like this: one AS2 connection to Walmart, SFTP to two regional grocers, and VAN routing for a specialty retailer that doesn’t support direct connections. You don’t need a $600/month enterprise platform to manage that. You need a setup that’s sized for what you actually send. EDIBridge was built specifically for this mixed-connection reality that small suppliers live in.

Implementation Timeline by Connection Type

• SFTP: 1–3 days to configure credentials and test file exchange. Fastest path to compliance.
• VAN: 3–7 days typically, assuming your provider is already on the retailer’s approved VAN list. Delays happen when they’re not.
• AS2: 1–3 weeks end-to-end. Certificate exchange, endpoint testing, and ISA/GS envelope configuration all need validation. Walmart’s AS2 testing process has specific interchange acknowledgment requirements that catch first-timers.

If a retailer is threatening to pull your PO until you’re EDI-compliant, SFTP (where accepted) is your fastest path. AS2 to Walmart is not a weekend project unless someone has done it many times before.

What Actually Goes Wrong

The connection type is rarely the source of chargebacks. What creates compliance failures:

• 997 acknowledgments not processed — your system receives the 997 back from the retailer but nothing acts on it, so failed transactions go unnoticed
• 856 transmitted after ship confirmation instead of before carrier pickup (Walmart’s window is tight)
• Segment counts wrong in the 810 — invoice totals that don’t reconcile with the 850 PO quantity trigger holds
• ISA/GS envelope identifiers wrong for the specific trading partner — this is a VAN configuration issue more than a protocol issue

If you’re evaluating EDI platforms or switching from an enterprise provider, the EDI implementation guide at EDIBridge walks through the transaction-level setup in detail. And if you’re mid-contract with SPS or TrueCommerce and questioning whether the cost is justified, tebcoforge.com can do a straight comparison against what you actually need to send.

The protocol question matters. It just matters a lot less than getting your 856 right.