Amazon, Accenture and Mastercard take digital ID to supply chains
Amazon, Accenture and Mastercard are using digital identity, blockchain and mobile payments to crack a window into sustainability and inclusion, but they’re also gaining potential retail benefits by capturing consumers who crave information about the origin of products.
The companies are pushing a “circular” supply chain that can directly reward sustainable practices of small-scale growers and suppliers. Amazon Web Services, Mastercard, Everledger and Mercy Corps are rounding out a team that wants to connect the “first mile” and “last mile” with a visual record that is traditionally not available—consumers don’t usually have easy point of access to the detailed growing practices of farmers behind the product in a store or online.
Customers can use Accenture's supply chain to identify producers that use sustainable methods, and financially reward these producers with a “tip” in the form of a direct payment. This incentive can help producers, manufacturers and retailers to manage inventory, create more transparency across supply chains, and ensure authenticity.
For example, a farmer who harvests a crop without cutting down trees can demonstrate that practice to distributors and supermarket chains. A consumer at the supermarket can use an app to view this practice, then tip through the card network. A biometric digital ID connects the consumer, supermarket and farmer, making the transaction circular and decentralized.
Accenture, Mastercard and Amazon did not provide comment on the collaboration by deadline. The companies are positioning the product as a way to help large companies, governments and NGOs by providing a way to track supply chains to small producers, improving access for consumers and small farmers by building trust between stakeholders.
But there are other benefits for retailers through such a model, since it provides more visibility into supply chains.
“This gets at the essence of retail life cycle, using data to achieve superior value chain control,” said Richard Crone, a payments consultant. “This [can power] using the data to get ahead of the competition to deliver exactly what consumers want and where they desire it.”
Products such as consumer packaged goods, parts and raw goods have a universal product code that identifies it as a storage keeping unit, or SKU. This information is usually not visible through the supply chain, so there’s often gaps in transaction information that can be hard to track down, if it all.
“Having SKU-level data flow freely throughout the supply chain, back and forth, is the foundation for whole new data-driven businesses,” Crone said, likening the information flow to social money transfer, in which a payment accompanies the reason for the transaction as well as the parties to that transaction. “This is ‘Venmo’ for the supply chain.”
This information can help develop preemptive distribution in a two-way fashion, with information about when a shipment was made, purchased and consumed—and by whom and why, Crone said. “This is a big move for Amazon, as it already provides the backbone of many companies through Amazon Web Services.”
The partnership also tests the power of non-static, shared digital identity and authentication. If an ID can be recognized across the different parties, such as a retailer’s app, mobile payment app, it can power a link between a consumer and a small farm much easier than distinct passwords for each step.
Beyond the general data benefits, there is an addressable market for Accenture's stated agriculture use case.
The World Bank estimates a shared identity can bring more than one billion people into the financial system. Nearly three quarters of the world's farms are less than one hectare, according to globalagricuture.org.
The blockchain can also provide more information to consumers, who are increasingly demanding details about sourcing of groceries, along with other specifics on sustainability.
Blockchain has shown potential to support security and identity vetting across a network, rather than centralized model.
"Correctly identifying a farmer in third world country will prove challenging,” said Tim Sloane, vice president of payments innovation at Mercator Advisory Group, adding a self-sovereign identity system such as Sovrin that allows a person to collect attestations from reliable third parties may be a sustainable option to vet suppliers in such a model. “Also it needs to be recognized that while data in a blockchain is immutable, the blockchain can’t automatically validate the information entered into the ledger is valid.”