EDI Charging Types: Connection & Session, Transaction and Character, Creative Billing
EDI Charging regarding Connection & Session means that each time a company initiates a connection to the VAN they can be charged for the connection. They can also be charged for the length of the session time. Also, there might be an extra charge for each interconnect transaction, since VANs do not have cooperative billing between each other, they will make up the cost of the resources used with interconnect fees.
Transaction and Character Charges
This will generally be the bulk of the charges on the VAN bill. There may be a charge for each transaction, e.g. to transmit each EDI purchase order might cost 25 cents. The charge might apply to the number of kilocharacters (thousands of characters) in the transaction. An average transaction might contain one thousand characters (which is one kilocharacter). An example fee for each one-thousand characters can be $0.25. This can be dangerous if a company unexpectedly receives a very large volume transaction. That is why it is important to negotiate volume discounts with the VAN and to coordinate
potential high-volume transactions with trading partners ahead of time. Some VANs offer discounts if data is transmitted during offpeak hours, similar to cell phone companies.
Creative Billing
In the recent years, the VAN service providers have been losing customers who have switched off the VAN to a direct connect method (described in the next section). In order to be competitive, most VANs now offer more flexible and creative billing scenarios. For example, a flat fee rate for an unlimited number of transactions. In dealing with VANs, you must be very aware of all the charges that will be imposed, compare them to the volume and nature of data your company transmits and receives,
and be prepared to shop around and negotiate.
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