CREATING DIGITAL PAYMENT METHODS FOR CAMBODIAN GARMENT WORKERS

Mastercard has announced that they will pay garment factory workers digitally on a global scale – including in Cambodia.

The financial corporation teamed up with companies such as Levi Strauss and Marks & Spencer to coordinate the pilot programme in Cambodia and Egypt.

The workers of participating factories can set up either debit, prepaid cards or digital wallets that will allow employers to deposit wages directly into the accounts of their workers.

Within Cambodia, the garment sector employs about 800,000 workers. The value of apparel exports in 2018 accounted for about 74 per cent of Cambodia’s total exports.

The initiative will also provide workers with hands-on peer training on digital financial services, financial planning and management, which aims to make workers comfortable and confident with making digital transaction.

Cambodia has a low amount of formal banking interactions and citizens prefer cash and gold for spending and saving. However, according to a research by Hootsuite and We are Social, there was an increase of more digitally savvy population. The amount of active internet users grew by 56 percent from January 2018 to January 2019 and more and more Cambodians are using digital payment methods.

According to World Bank’s Global Findex Database 2017, approximately 230 million adults around the world, nearly 85 percent of adults in low-income countries, working in the private sector, receive their wages in cash.

Getting paid in cash can create significant challenges for both employees and factory owners. Not only are workers at risk of theft, but they also have limited ability to save and often have to take days off to travel miles to pay household bills.

Garment factories that have shifted to digital payments have also increased access to saving accounts for their factory workers, from 28 percent to 43 per cent.

The aim is to create digital solutions and give workers more transparency and control over their earnings and savings.

“It’s an important step in helping workers feel safer, be more resilient and more financially independent,” says Sue Kelsey, Executive Vice President, Prepaid Solutions, Mastercard.