Mastercard has teamed up with American apparel brands Levi Strauss & Co and VF Corporation as well as British retailer Marks & Spencer to provide garment factory workers access to digital payments.
Additionally, Mastercard has collaborated with global non-profit Business for Social Responsibility (BSR), which represents over 250 businesses and partners.
All the partners will collaborate to ensure that garment factory workers are paid electronically to help them build more secure financial futures.
According to a study, approximately 230 million workers who are employed by the private sector are paid in cash.
Not only the cash payment brings the risk for theft but also deprives workers of the opportunity to save for the future. Often, they have to abstain from the work to travel miles for paying household bills.
Initially, Mastercard and its partners are testing the wage payment using a hybrid digital payment solution in Egypt and Cambodia.
As part of the collaboration, the participating factories will have to deposit wages directly into workers’ accounts.
To access the fund, the workers will be offered debit or prepaid cards.
Additionally, the workers will be given hands-on peer training on digital financial services, along with financial planning and management.
Mastercard executive vice president of prepaid solutions Sue Kelsey said: “At Mastercard, our vision is to ultimately build a new ecosystem of partners – garment industry, technology, not-for-profit organizations, factories, banks – that work together to deliver social impact at scale.
“It’s an important step in helping workers feel safer, be more resilient and more financially independent. We’re committed to helping digitise wages throughout supply chains across industries and continents, turning access into usage and in turn, fuelling the growth of local economies.”
A study by BSR’s HERfinance shows that garment factories adapting to digital payroll are able to save 53% of their staff time for the teams that count and disburse wages.