Peppol: what it is and how it works

Peppol is the system that allows companies from different countries to exchange transport documents and electronic invoices in a standardized and secure manner through a certified network.

Originally created as a project by the European Commission to facilitate transnational e-procurement procedures, Peppol is now used worldwide. Its structure includes a network infrastructure, interoperability technical specifications, and a set of agreements regulating the system's usage.

What is Peppol AgID?

Peppol stands for Pan-European Public Procurement On-Line. It is a project that started in 2008 to simplify trade between European countries but has since taken on a global role in the exchange of electronic commercial documents between countries.

It is not a platform for document transmission but a network that connects various existing platforms for this purpose: essentially, all service providers that adhere to Peppol standards can use the network infrastructure to connect with other service providers.

By connecting to Peppol, it is possible to exchange commercial documents and electronic invoices with providers worldwide: the only essential requirement is that both parties involved in sending and receiving must be Peppol-enabled.

The governance of the system is managed by OpenPEPPOL, an organization responsible for overseeing the central components of the infrastructure (i.e., the eDelivery Network, interoperability specifications, and the agreements regulating its use).

At the peripheral level, the network is overseen by the various national Peppol Authorities. In Italy, this role is fulfilled by AgID (Agency for Digital Italy), which, among other tasks, is responsible for accrediting different Peppol Access Point providers.

How does the Peppol system work?

If an entity wants to get accredited on the Peppol network, the first thing it needs to do is choose an accredited intermediary, which will function as an Access Point to communicate with other nodes on the network.

The intermediary will provide a Peppol Participant ID, which is the unique electronic address of the entity within the network.

The system uses a four-corner model: in this schema, the first two corners are the sender and the recipient, while the other two are their respective Access Points, which connect the two users. This model has allowed overcoming the old “three-corner” system that prevented e-procurement networks from functioning when the supplier and the customer had different providers.

When a user sends an electronic Peppol invoice, the sender's Access Point performs a look-up action to locate the receiving Access Point. This is facilitated by the Service Metadata Publisher (SMP), a node that helps identify the Access Point where the recipient is registered and verify its availability to receive the document.

International electronic orders also involve the Italian Revenue Agency's Interchange System, which handles receiving, translating, and delivering the electronic documents received according to Peppol standards to and from Italian users.

Peppol Electronic Invoicing: the Participant ID

When communications occur through the Peppol network, the sender and recipient are identified by the Participant IDs provided by the service provider.

For Italian companies, the IDs follow these codes:

- 0211:ITpartitaIVA;
- 1210:CodiceFiscale;
- 0201:CodiceIPA (for public administrations);

To send electronic invoices abroad via Peppol, it is not enough to be registered on the international network; it is also necessary for the invoicing documents to include the Participant ID.

All orders received via Peppol (as is also the case with other systems like NSO) must contain the so-called identification triple, namely: document identifier, document issuance date, and Endpoint ID, which is the sender's ID.

Peppol: Advantages and Prospects

Originally conceived as a European project, Peppol soon proved to be a highly successful resource, leading several countries to adopt it: Singapore and Japan were the first non-EU countries to become Peppol Authorities, followed by Australia, New Zealand, and Malaysia.

The Peppol interoperability framework is essentially a form of “shared language” through which private companies and public entities from different countries can connect by exchanging any type of commercial document in a secure and certified manner.

Additionally, adherence to the standard enables the automation of manual invoicing processes and document searches, reducing costs and the likelihood of errors.

The fact that any provider can join the network provides a significant advantage for businesses and public entities, allowing them to choose the most suitable provider from among the many AgID-certified providers.

Primarily used for electronic invoicing, the Peppol infrastructure has the potential to manage other types of documents as well: according to Open PEPPOL, the system could be used in the future for logistics standardization and for managing information exchange between the public sector, citizens, and businesses.