The Catalyst for the Much-Needed E-Commerce Evolution: Verifiable Credentials
E-Commerce has gripped the global market, but enhanced consumer access to cheap goods comes at a hefty risk for brands. The apparel market has particularly been infiltrated, accounting for nearly 15% of all seized counterfeit products (OECD).
The rise in counterfeit products can be attributed to an increasing rate of de minimis shipments, valued at $800 or less, which have put increasing strain on US Customs and Border Protection operations and made it difficult for CBP officials to detect and intercept counterfeit goods. The sheer volume of these shipments — totaling 1 billion in 2023 according to CBP — makes manual inspection virtually impossible.
Transmute has spent five years working with CBP and DHS to introduce a powerful solution to the future of trade: verifiable credentials. By transforming traditional trade documents into these wholly digitized twins, we can trace each shipment’s data trail from the original source all the way down the supply chain. Cryptographically signed and secured data provides unprecedented insights for CBP, empowering them to automatically verify shipment authenticity and origin.
Verifiable credentials within the supply chain will enable brands and consumers to build trust, protecting intellectual property and mitigating financial risks. By facilitating the sharing of trustworthy data earlier in the process, CBP can vet trusted trade actors and focus their efforts on suspicious shipments.
Transmute’s apparel use case will be officially tested in a commercial and operational setting in November 2024 during the E-Commerce Tech Demo. Parties interested in observing how the data “pipe” to CBP will operate may submit their interest here.
The flow Transmute presents is relatively straightforward, but here’s a visual of the process:
The process kicks off with GS1’s Global Office issuance of a GS1 Prefix License credential, then shared with the GS1 US member organization, who creates a GS1 Company Prefix License credential and assigns it to a brand owner. This organization owns the creative rights and intellectual property to a brand owner; think Disney or Skechers. As a trust anchor, GS1 recognizes the brand’s authority over its IP, establishing it as a creditable, vetted organization with the power to grant other parties contracted allowances to create and sell products using its brand name.
Extending the trust established by GS1, brand owners are then able to issue several documents that assert they’ve done business with a third-party retailer (for E-Commerce use cases, these are online sellers), and the seller’s goods are permissible, rather than counterfeit. Traditionally, this contracted relationship is nearly impossible for CBP to discern independently, but with GS1 and brand owners issuing credentials that establish the third-party as a legitimate actor, CBP doesn’t need to seize the goods and verify their authenticity.
Issuing documents that recognize a retailer’s legitimacy in the form of a verifiable credential allows brand owners to maintain greater authority over their brand and goods. They retain the power to revoke the credentials at any time, whether as a result of malintent or contract expiration. If goods presented to CBP contain a revoked credential, officials will automatically be notified of the “broken” trust chain and seize the package.
Verifiable credentials serve online sellers as well. When the retailer has been verified as a trusted party, they can submit standard import documents (commercial invoice, packing list, etc.) to both logistics providers and CBP as soon as the data becomes available — sometimes as soon as a customer has placed the order. Pre-arrival data reduces delays at the border, which often result in hefty fines and consumer dissatisfaction. Brands and sellers who submit pre-arrival data in the verifiable credential format deepens CBP’s trust in them, with expanded capacity to target suspicious goods.
The ability to reconcile and visualize interconnected data points is (perhaps surprisingly) unprecedented. Today, officials are required to manually connect data elements, coding relationships one data element at a time to generate a comprehensive issue of the data, its validity, and its issuers. You can imagine how redundant and inefficient this process is, and the toll it takes not only on CBP officials, but also on brand owners eager for a way to confidently map the path their products — and data — follow along a supply chain.
Verifiable credentials issued through Transmute’s Platform represent a unique opportunity for organizations and CBP to automatically render a visual representation of the data in the form of a “trust graph.” The data is “living,” meaning the chain will be automatically broken if there’s an attempt to tamper with the data or if the contract enabling a seller’s temporary use of a brand’s IP expires. It’s also “smart” — officials can query the graph, specifically seeking to comprehend the relationships between the supply chain actors, and gauge their authenticity. If an online seller fails to demonstrate a chain of custody that extends to a trust actor — like GS1 — the gap will be immediately obvious and won’t require custom assembly of the data.
Verifiable credentials and trust graphs represent a new era for global supply chains — one built on trust, transparency, and dynamic data.
You can find Transmute’s E-Commerce and Steel Workflow Diagrams on https://platform.transmute.industries/workflows/definitions.
Transmute is committed to digitizing supply global chains, applying modern cryptography standards for more efficient, automated, and safer cross-border trade.
Sign up for free now on https://platform.transmute.industries.
Ava Tusek
Operations Manager
Transmute
https://platform.transmute.industries
