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The term 'EDI,' which stands for 'Electronic Data Interchange,' has been in use since 1970. (EDI) begins with connecting to a reliable and secure peer-to-peer (P2P) network. Integrate data from various physical documents and process information electronically. The process of exchanging business documents (purchase orders, invoices, shipping documents) between organizations is known as EDI. It is primarily used by major enterprises in a variety of industries (retail, healthcare, financial services, manufacturing, and distribution) that receive a huge number of invoices (typically 30,000 or more per year).


Application programming interfaces (APIs) perform the same functions but in significantly different ways. While EDI creates a connection between two EDI systems, API is a web-based protocol that allows different systems to communicate with each other. Using cloud-based technology, the APIs enable data to flow between systems in less than a second.

Comparing EDI and API

A popular approach to EDI uses the hub-and-spoke model, where a larger trading partner like Walmart is the hub and smaller partners like suppliers are the spokes. The center usually provides the specifications and formats that smaller partners must use to communicate. So, if you're a smaller company working with larger trading partners, they will often set the EDI standards you use and guide you to some extent in your technology choices. But in addition to helping, you meet the requirements set by key partners, EDI offers several key advantages over APIs.


EDI offers standard protocols such as X12, EDIFACT, EANCOM, and others for document specifications created by third-party governance organizations. These standards provide a detailed framework for codified business processes in which all parties agree on specific formats for exchanging business documents such as invoices, purchase orders, and shipping statements. For example, each partner can include any fields on the invoice, such as billing and shipping addresses and order numbers, and these fields will always appear in the same format in the same place on the document.

APIs, on the other hand, are free to construct any structure utilizing standard communication formats like JSON. Because there are few guidelines for how communication should look between organizations using an API method, you'll need to communicate with your trade partners more to agree on messaging formats and data flow.


With EDI, vendors conduct extensive industry-wide interoperability testing to ensure the software is compatible across vendors and to eliminate communication issues. For example, vendors undergo Drummond testing for AS2 and AS4 secure messaging products four times a year. In contrast, APIs are unregulated. There are no processes to ensure vendor solutions are compatible with each other.


EDI has well-designed and standardized security mechanisms, making it one of the most secure ways to transfer data. Encryption and signing ensure that only predefined and authorized users can access the data. Non-repudiation capabilities – receipts and confirmations at different transaction levels – are available to accurately track usage. APIs do not inherently have the same level of security as some traditional EDI protocols. Although point-to-point messages can be secured with SSL/HTTPS, you still need to create workflows to support non-repudiation.

The bottom line is that for large organizations with a high volume of transactions, EDI still makes the most sense as it is highly reliable and provides audit trails for traceability in the event of an error.

When to Consider APIs?

Although APIs will never completely replace the EDI for the reasons just described, they have clear use cases. Many small businesses are discovering that they can use APIs as a stepping stone to automated B2B communications. Alternatively, APIs can replace and automate existing communication systems, such as Web-EDI, which provides a portal for partners to manually complete shipping forms online.

For these use cases, APIs offer several advantages over EDI

Rapid Development

EDI is based on complex and opaque document formats, thus mainly used by EDI professionals. Also, in the past, API development was code-heavy, vulnerable, time-consuming, and error-prone. But today, many developers use technologies like JavaScript Object Notation (JSON) and the Swagger Open API Specification that make it faster and easier to build APIs.


JSON is a widely used and easy-to-understand syntax for storing and exchanging data.


Swagger is an open-source framework designed to create machine-readable definitions for APIs.

Scalable & Agile

APIs make it easy to scale and load balance large-scale business processes. They also make it easy to quickly adapt business processes, allowing the organization to respond to new initiatives much more quickly.


Applications, databases, and other systems can easily connect to APIs. They are usually much lighter and easier to connect. For example, on mobile devices. Traditionally, EDI systems are more complex and require more resources to run and manage.


Many techniques make it easier to build and use APIs. In addition to benefitting from these technological advances, it is easy to find people who can build and manage API processes, whereas EDI is a much more specialized technology and harder to find personally to manage.

Compare EDI to API, and it becomes clear that neither technology is perfect. Each has its strengths and weaknesses. The truth is that one person's strengths often make up for another's weaknesses. Together, they create a formidable solution for B2B interactions.

EDI enables the secure exchange of various business documents in a standard format suitable for business partners. It can handle as much batch processing as your current supply chain requires. It also provides security, auditability, and reliability, as well as a variety of value-added EDI services in areas such as community management and analytics.

However, EDI can suffer from real-time data transmission. It is weak in areas like security and data volume, but the API is an area of ​​strength.

Some are rarely mentioned. In a way, the rise of APIs creates an environment that EDI is designed to address. Although APIs can communicate directly between systems, their use can explode the number of individual API connections that organizations must manage, whether internal communications between systems or external communications with trading partners.

According to one API vendor, its API collections — the places where developers store their APIs — have grown from less than half a million to more than 46 million in five years. API management becomes a major challenge.


Although the EDI format is a decade-old technology, it is still a widely used standard and the most convenient choice for many companies. On the other hand, it is a newer and more powerful API for synchronizing web apps. Business leaders can invest in an API to leverage its speed and connectivity across multiple systems. EDI is still the primary data interchange system, but that may change in the next decade.

EverestDX aims to help organizations understand the difference between EDI and API!