What is the difference between, EDI (Electronic Data Interchange) and POS (Point-of-Sale)? Banks provide machines at departmental stores to facilitate payments by credit/debit card. Are they (such facilities) POS or EDI ?

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The difference between Electronic Data Interchange (EDI) and Point-of-Sale (PoS) is fairly fuzzy but I will try to describe them in layman's terms...

PoS systems typically refer to the devices available to the end user, or purchaser. For example, when you buy something at your local department or grocery store, you swipe your card through a reader (or the cashier does it for you) and the device connects to an online system (over dialup phone line or network), then gets approval for the purchase (this is where EDI may come into play), indicates to the register that approval has been confirmed, and a receipt is printed for your signature.

Typically EDI refers to backend system to system communication, where one system needs to share or correlate data with another system. For example, the banking computers that may communicate behind the scenes in a PoS transaction may implement a form of EDI to exchange data, update applications, and control the backend transaction.

This was first published in September 2003

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