AS2 EDI is a facet of Electronic Data Interchange communication methods that supports all EDI communication and any other transmittance of information through the Internet using HTTP. Internet-based EDI communication has been available for some time, but popularity increased in the early 2000s with the use of AS2 EDI and its products. In 2002, AS2 EDI was adopted as standard practice by the Retail and CPG Industry, which increased the usage of AS2 EDI across various industries.

AS2, which stands for Applicability Statement 2, is a messaging protocol introduced in 2002 to enable business-to-business data to be sent directly and securely from one location to another electronically.

AS2 differs from EDI because it uses TCP/IP — the basic communication language of the internet — rather than a Value Added Network (VAN), and the receiving machine must be connected to the internet at the time the message is sent. Like EDI, AS2 can handle all file formats and is perfectly suited to the transferal of orders and invoices.

Part of AS2 EDI’s popularity and efficiency lies in its use of digital signatures, receipts, data compression, and encryption codes. All of these factors increase the security of EDI communication and information transmittance. This is especially critical in an age where encrypted transactions are essential to avoid third-party unauthorised interception of company or client data. With AS2 EDI, companies can remain confident in their transmission of sensitive business data. 

Every AS2 EDI document can receive an automatic response. With an AS2 system, the sending party is alerted when the document was received successfully, or if unsuccessful, a message informs them that the document will be queued for re-sending. This allows parties to know with immediate certainty that an EDI transactional set was sent without having to manually check each time.

AS2 is peer to peer and as such, avoids using Value Added Networks which can often have a charge associated for the traffic that passes through them. 
AS2 delivers a greater degree of security by creating an ‘envelope’ for EDI data, allowing it to be sent securely over the Internet – using digital certificates, signatures and encryption.

Another benefit is that AS2 EDI doesn’t depend on additional software that must be added at the supplier’s end of the communication chain. Because AS2 EDI technology is “push” technology (Peer-to-Peer, also known as P2P), the speed of AS2 EDI communication is instantaneous. Delivery methods of data occur at a much faster rate because the document doesn’t have to be stored then forwarded. AS2 is unlike EDI communication using Value Added Networks (VAN), modems, or Bulletin Board Systems (BBS). 

An AS2 connection requires two locations to be configured to send and receive messages to and from each other — and if one of these locations is not available, the message can be missed. The technical competency required to set up and maintain an AS2 connection can be too great for many companies, with constant connectivity needed to ensure no messages are missed. Many companies therefore choose to outsource their requirements to a specialist EDI provider who can ensure 24/7 connectivity. Outsourcing also means that companies do not need to invest in dedicated hardware and software.

An MDN (Message Disposition Notification) is an electronic return receipt which a trading partner can request during an AS2 interchange and is a method of acknowledgement that is sent to the sender to confirm the message has been transmitted completely. This is seen by many as an additional benefit of AS2 as it provides non-repudiation.

In the UK, many companies use AS2 in a wide range of sectors including insurance and healthcare, however it was the retail and CPG sector that first embraced its use. UK retailers including Asda, ALDI, LIDL, Ocado and Co-op require their suppliers to send AS2 EDI messages. 

AS2 EDI is an internationally recognized and approved method for transmitting business documentation and data over the Internet in a secure manner. AS2 EDI is a simple way for global and international companies to communicate. This is especially true of those whose trading partners who already use EDI communication to transmit purchase order or inventory data. This method decreases costs and improves overall performance without restructuring the formats of EDI documents themselves. Many organisations have already transitioned to AS2 EDI communication.