EDI vs. API: Key Differences in B2B Integration

Both EDI (Electronic Data Interchange) and API (Application Programming Interface) enable data exchange between business partners — but they do it in different ways.

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What is EDI?

• A standardized format for exchanging business documents (PO, Invoice, ASN, etc.).

• Batch-based: documents are sent in structured files (X12, EDIFACT, VDA).

• Works well for large-scale, regulated industries (retail, healthcare, automotive).

Example: A retailer sends an EDI 850 Purchase Order to a supplier.

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What is API?

• A real-time communication method between applications.

• Data is exchanged instantly using web technologies (REST, JSON, XML).

• Works best for instant updates (inventory checks, shipment tracking).

Example: An eCommerce site calls a supplier’s API to get livestock availability.

EDI vs API – Key Comparison Points

EDI (Electronic Data Interchange)

1. Standardized way to exchange business documents (X12, EDIFACT, VDA).

2. Works in batch mode (transactions sent in groups, not instantly).

3. Strong in compliance-heavy industries (retail, healthcare, automotive).

4. Typically uses VANs, AS2, SFTP for communication.

5. High setup cost, but reliable and secure for large trading networks.

6. Limited real-time visibility — documents are processed after transmission.

7. Mature technology with widespread global adoption.

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API (Application Programming Interface)

1. Real-time communication between systems using JSON, XML, REST, SOAP.

2. Provides instant updates (e.g., inventory levels, shipment tracking).

3. Easier to integrate with modern cloud apps and mobile systems.

4. Lower setup cost, but requires both parties to support the same API.

5. Flexible but less standardized compared to EDI.

6. Best for speed, agility, and real-time customer experiences.

7. Growing adoption in eCommerce, logistics, and fintech

Many modern businesses use a hybrid model:

• EDI for core business documents (orders, invoices, ASNs).

• APIs for real-time visibility (inventory, order status, shipment tracking).

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Summary:

• Use EDI when compliance, standards, and reliability are key.

• Use API when you need speed, real-time insights, and flexibility.