What is AS2? Understand AS2 Protocol and AS2 Certificates in EDI

AS2 (Applicability Statement 2) is a trusted protocol for securely transmitting business-critical data, particularly EDI, over the internet. By leveraging encryption, digital signatures, and certificates, AS2 ensures data confidentiality, authenticity, and integrity while enabling real-time acknowledgments. Its ability to support multiple data formats and avoid EDI VAN (Value-Added Network) fees makes it a cost-effective choice for industries like retail, logistics, and manufacturing.

However, AS2 adoption comes with challenges, such as managing trading partner connections, maintaining certificates, and configuring firewalls. To simplify these complexities, modern AS2 integration platforms automate certificate management, streamline partner onboarding, and provide real-time monitoring. 

Solutions like Cleo Integration Cloud extend AS2 beyond secure transport by supporting supply chain orchestration: synchronizing end-to-end processes across a multi-enterprise network. By unifying AS2-based EDI with APIs and managed file transfer (MFT) in a single execution layer, teams gain the visibility and coordinated action needed to reduce exceptions and protect outcomes across partners.

Read on to learn more. In this article, we'll cover:

• What is AS2?
• How does AS2 work?
• Requirements for AS2 implementation
• Why choose AS2 communication?
• What are the benefits of AS2?
• What are the challenges of AS2?
• Understanding AS2 certificates
• AS2 encryption & signing
• How to find the best AS2 software
• How Cleo does AS2

What is AS2?

AS2 (Applicability Statement 2) is an HTTP-based protocol for securely, inexpensively, and quickly transmitting messages (particularly EDI messages) over the internet. It ensures data integrity, encryption, and authentication by using digital certificates and encryption standards. AS2 has become the most commonly used protocol in EDI (electronic data interchange) in industries such as retail, healthcare, and logistics to enable secure and reliable B2B data exchange between trading partners.

AS2 and EDI

AS2 (Applicability Statement 2) is a secure communication protocol that transmits EDI documents over the internet while EDI (Electronic Data Interchange) defines the structured format of the business documents, like purchase orders and invoices.

Simply put, EDI is the content, while AS2 is the transport method. For example, an EDI purchase order (EDI 850) can be sent via AS2, FTP, or a VAN, but AS2 is preferred for its security, real-time delivery, and cost savings over traditional networks.

Let's understand how AS2 operates on a technical level.
 

How does AS2 work?

AS2 works by first encrypting and packaging the EDI file in a secure AS2 "envelope" with digital signatures. The message is then transmitted via HTTP(S) for real-time delivery. Upon receipt, the receiving system verifies the sender’s identity, decrypts the message, and returns a Message Disposition Notification (MDN) as proof of delivery, ensuring data integrity and confirmation.

AS2 is a standard by which users transfer EDI or other data, such as Extensible Markup Language (XML) or plain text documents, over the Internet using HTTP and HTTPS.  AS2 is a global method for transporting data used by millions of businesses worldwide, including most major retailers including Amazon, Target, and Bed Bath & Beyond. For instance, Walmart was the first major retailer to require its suppliers to use the AS2 protocol effectively replacing dial-up modems for ordering goods. AS2 communication has remained one of the most prominent communication protocols ever since.
 

Requirements for AS2 implementation

To set up AS2 (Applicability Statement 2) for secure data exchange, you need the following components:

• AS2 Identification and Certificates: Each participant in the AS2 communication must have a unique identifier, such as a Global Location Number (GLN), along with a digital certificate for encryption and authentication.
• Partner Public Keys: To ensure secure communication, you need the public keys associated with the certificates of your trading partners. These keys allow you to verify signatures and encrypt messages correctly.
• AS2-Compliant Software: A software solution that supports AS2 is essential for transmitting and receiving data securely over the internet.

Beyond these core requirements, additional considerations include setting up secure network connections, firewall adjustments, and establishing trading partner agreements to define encryption, signing, and compression settings.
 

How do you create an AS2 connection?

To create an AS2 connection there are several required components: two computers, a server, and a client.  Both computers connect to the Internet via a point-to-point connection. To transmit the desired data, AS2 creates an 'envelope' that allows for secure transmission via the Internet using both digital certificates and encryption.

Why choose AS2 communication?

Businesses choose AS2 for its strong security measures, cost savings by eliminating Value-Added Network (VAN) fees, and real-time communication capabilities that ensure reliable data exchange. It also supports regulatory compliance, meeting standards such as HIPAA and fulfilling data exchange requirements set by major retailers like Walmart and Amazon.

AS2 connection offers increased verification and security achieved using receipts, digital signatures, and file encryption. Its transactions and acknowledgments occur in real-time, increasing the efficiency of document exchanges. Because of its expansive security features and reliable, flexible transmission capabilities, AS2 is one of the most popular and mandated protocols in the business world.  Organizations use AS2 to facilitate EDI transactions (purchase orders, advanced shipment notices, invoices), and other standardized messages. With its ability to securely exchange documents quickly and reliably over the Internet, AS2 has been widely adopted across industries.

Some additional condensed reasons for AS2 include:

• Security: Data is encrypted, digitally signed, and protected from tampering.
• Cost Savings: Eliminates the need for Value-Added Networks (VANs), reducing transaction fees.
• Real-Time Communication: Immediate delivery and MDN confirmations ensure reliable data exchange.
• Compliance: AS2 is required by major retailers like Walmart and Amazon and meets industry regulations such as HIPAA for healthcare.

While these reasons are useful, let's explore them further in detail.
 

What are the benefits of AS2?

AS2 provides many benefits in order to power business exchanges and securely facilitate data exchanges with customers, suppliers, and partners. Learn more about the essentials of an AS2 Connector from a more in-depth coverage.

• Added security/privacy: End-to-end data encryption ensures the information in transit is secure. SSL encryption on the pipe, as well as hashing, also deliver added security.
• Flexibility: Almost any type of data can be transmitted. AS2 supports more than just traditional EDI formats like X12 and EDIFACT; it can securely transmit XML, JSON, CSV, PDFs, text files, and even proprietary business data. This adaptability allows businesses across industries to exchange a wide range of documents while maintaining security and compliance.
• Authentication: Digital signatures validate the authenticity and integrity of a message or digital document. Digital signatures and certificates verify sender identity, prevent tampering, and provide non-repudiation. This ensures secure, end-to-end data exchange while meeting compliance standards like HIPAA and PCI DSS, reducing the risk of fraud or unauthorized modifications.
• Nonrepudiation: The use of digital certificates confirms the document was actually sent by the claimed sender, and just as important, received by the intended recipient.
• Confirmation: The AS2 standard provides a status message called the Message Disposition Notification (MDN) to indicate whether the document was successfully delivered.
• Low cost: Facilitates point-to-point communication thereby reducing the need to outsource to managed services. It's very much like directly dialing long distance from your phone as opposed to seeking assistance from a phone company operator to place a call.
   

What are the challenges of AS2?

While AS2 provides a secure and efficient method for data exchange, there are several challenges that businesses often face when implementing and managing AS2 communications:

1. Certificate Management
   Challenge: AS2 requires digital certificates to encrypt and sign messages, which need to be regularly updated and managed for each trading partner. Keeping track of certificate expiration dates and renewing them can become cumbersome, especially when dealing with multiple partners.
   
   Solution: Implementing automated certificate management tools can streamline this process, providing alerts for renewals and centralizing certificate storage. Cloud-based AS2 solutions often include automated updates, reducing the burden on IT teams.

2. Partner Onboarding and Connectivity
   Challenge: Setting up secure connections with new trading partners can be time-consuming and error-prone. Each partner may have different security protocols or firewall settings, making initial integration challenging.
   
   Solution: Adopting cloud-based AS2 platforms allows for easy EDI trading partner onboarding by automating partner setup and reducing the need for manual configurations. These platforms often include pre-configured security settings that help ensure smooth, secure connections.

3. Firewall Configuration
   Challenge: Configuring firewalls for AS2 traffic is often tricky. Misconfigured firewalls can block or delay AS2 messages, leading to communication failures.
   
   Solution: Cloud-based solutions also help resolve this issue by managing firewall settings and ensuring that data flows securely without manual configuration. Many cloud providers offer managed services that automatically adjust firewall rules to support AS2 communication.

4. Scalability
   Challenge: As businesses grow and their partner networks expand, scaling AS2 connections and managing multiple trading partners can become complex. Manual oversight of each connection is time-consuming and prone to errors.
   
   Solution: Integrated AS2 platforms can scale efficiently, providing automated workflows, centralized management, and real-time monitoring of transactions. These platforms offer visibility across the network and can automatically handle new connections, making scaling more manageable.

5. Monitoring and Visibility
   Challenge: Without proper monitoring, it can be difficult to track the status of AS2 transmissions, leading to missed or delayed messages and potential disruptions in business operations.
   
   Solution: Real-time monitoring tools built into AS2 platforms provide instant visibility into transmission status, allowing for proactive issue resolution. Notifications and alerts ensure any delivery problems are quickly addressed, maintaining smooth operations.

By adopting automated AS2 software and leveraging cloud-based EDI solutions, businesses can address these challenges, streamline their processes, and ensure efficient, secure data exchanges with partners.
 

Understanding AS2 Certificates

When using electronic data interchange (EDI) software or MFT file transfer solutions, digital certificates can be used to secure data transfers between systems. Certificates can encrypt the data transfer in multiple ways.  First, the data itself could be encrypted, making it unreadable by any receiving system unless it has the proper decryption key. Second, the communication channel that the data is being sent through could be encrypted.  Third, AS2 encryption could apply to both the data and communications channel.  It is common for certificates to secure AS2 communication (data encryption) or SSL connections (communication channel encryption).
 

AS2 Encryption and Signing

AS2 communications will often use certificates to secure data via encryption, based on public and private keys.  The receiver of the AS2 secured data has a private key that either they created themselves or purchased from a certificate authority.  From this private key, the receiver will export a public key that is given to the party sending the data.  The execution begins with the sender encrypting the data using the receiver's public key.  Next, the data is transmitted by the sender to the receiver.  Last, the receiver decrypts the data using their associated private key.

A digital certificate can be either self-signed or part of a certificate chain.  A "self-signed" certificate does not require a chain and is self-sufficient.  A certificate that is part of a "chain" (consisting of a Root Certificate, Intermediate Certificate, and Leaf Certificate - the part of the certificate that is most often worked with) requires the higher-level certificates to also exist on the system.  Often, the root (primary) and intermediate certificates are already on each user's system and do not need to be sent when exchanging leaf certificates.  If not, then the receiver would send the associated root and intermediate certificates needed to complete the chain, to the sender.

AS2 can also sign data to verify the sender, based on certificates.  The sender signs the data using their own private certificate that is then verified by the receiver against the sender's public certificate.  This verifies the sender's identity, as they should be the only entity to own their private key.

Securing data through AS2 encryption technologies has made it possible for applications to host and transmit data without concern that unauthorized users may intercept and use this data without the necessary decryption and authorization. 

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How to Find the Best AS2 Software

If you're considering MFT service options for your organization, refer to our guide on how to find the perfect MFT provider with just 10 questions.

Would you purchase a vehicle - the one that carts your entire family around - that had been rigorously tested for head-on collisions but not for side-impact crashes, which account for about 25% of all traffic collisions?

Would you count on a watch that told the right time but, only most of the time? What if the balance wheel or hairspring inside these mechanical devices was only tested for a limited number of altitudes or climates? Would you buy it?

The majority of companies go through appropriate testing processes to validate the functionality, safety, and usability of their products. But if they just certify the main features - the ones they deem important - does that really mean the product is certified?

The Drummond Group certifies a number of advanced communication protocols, AS2 being one of them, and not many AS2 software vendors go through every Drummond test, even the optional ones.

So, start with Drummond and work your way backward.

Why Cleo is #1 for AS2

Cleo's AS2 has been Drummond Group-certified since 2002 — passing every test, every time. Cleo's certification includes the optional tests for critical features every AS2 protocol should have, including:

• Certificate Exchange Messaging (CEM) for automated certificate management

• AS2 Restart or a more efficient and reliable transfer of large files

• Chunked Transfer-Encoding

• Filename Preservation with Multiple Attachments

• Reliability

• SHA-2 for the emerging requirement for signing messages using secure hash algorithm 2

Some notes about three advanced features in leading AS2 software solutions:

• Automated certificate management: CEM was an initiative begun in 2003 to automate the certificate exchange process, and interest in CEM-capable solutions continues to grow because of the significant time savings compared with the manual replacement effort. Perhaps even better, it helps to ensure no communication downtime between you and your valued customers and critical supply chain.

• AS2 Restart: This feature eliminates the need to resend the entire message when connections fail. The server picks up where the transmission left off, saving time and system resources. This is especially true when a communication hiccup occurs 80% of the way through a very large file. Why resend all of the data that already successfully made it through?

• SHA-2 compliant: Canada's Telecom Decision CRTC 2015-435 mandates TSPs to use SHA-2 encryption by mid-2016. Few data exchange companies have been certified in every Drummond SHA-2 test since that option was introduced in 2012, and the use of SHA-2 encryption is only gaining in popularity.

Ask Microsoft and Facebook.

Leading MFT vendors test to ensure customers and partners get the most value for their money and can have full faith that the software will work for all of their business needs, now and in the future.

Coupled with the fastest setup (within two hours) of an AS2 connection, these are just some of the reasons Cleo became the favorite AS2 vendor for Walmart suppliers in the wake of the retail giant's 2002 mandate. Cleo led the way with standards work and Walmart to make AS2 implementation happen on a much bigger scale.

We've got much more reading on the history of AS2 and what leading organizations look for when choosing AS2 software. And remember, not all AS2 - and not even all certified AS2 software - is equally able to serve your organization's requirements.

AS2 is essential for secure, standards-based B2B exchange, but it’s only the starting point for modern execution across your trading partner network. Cleo supports supply chain orchestration by unifying AS2-based EDI with APIs and MFT in a single execution layer, helping keep onboarding, visibility, and response coordinated as your requirements evolve.

If you have any questions about what was in this blog, supply chain orchestration, or how Cleo can help your business, contact our team at sales@cleo.com and check out our content hub for more resources.

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