Value-Added Network (VAN)

A value-added network (VAN) is an electronic clearinghouse for data—a third-party network that, in addition to the communication services it provides, offers skills, expertise, consultation, and educational services. A VAN acts as an intermediary between trading partners. In essence, a VAN functions similarly to postal services. Similar to how postal services receive mail from senders, sort it, and then deliver it to the intended recipient, a VAN receives transactions from a sender and then places them in the electronic mailbox of the recipient. The main differences are that VANs function in a virtually paperless, highly automated environment, and they also provide the "value-added" aspects (listed above) to communications services.

A VAN establishes an electronic mailbox for each trading partner employing its services. A sending partner electronically transmits the business data to the VAN through modem and phone lines. The network receives the transactions, sorts them by receiver, and stores them in the receivers' mailboxes until they are picked up.

VANs also provide security controls to ensure data integrity. Each organization with a VAN account will have a password that must be used to access their mailbox. Data encryption is another example of a security control provided by VANs. These controls are used to ensure that an organization's computer software, data, and programs are protected against any unauthorized access, disclosure, or modification. In addition, VANs offer data translation services between different EDI standards, provide an automatic backup system and archiving plan for all mailbox contents, and offer error detection and correction services.

The services VANs provide, in addition to the transmission of business data, are the value-added component of the network. Most VANs allow businesses to retrieve messages at the same time they deposit their outgoing transactions. Additionally, most VANs provide 24-hour, 7-days-a-week access.