Electronic data interchange (EDI), or electronic data processing, is the electronic transmission of data between computers in a standard, structured format. Electronic funds transfer (EFT) is the term used for electronic data interchanges that involve the transfer of funds between financial institutions.

EDI has allowed companies to process routine business transactions, such as orders and invoices, more rapidly, accurately and efficiently than they could through conventional methods of transmission. While EDI has been around for decades, it wasn't until the late 1990s that this basic principle became a driving force in the rollout of electronic commerce, corporate extranets linking suppliers and customers, and related network-based technologies.

History

EDI has been present in the United States in some form since the mid-1960s. Businesses had been trying to resolve the difficulties intrinsic to paper-dependent commercial transactions. These...