The Potential Gains of Digitizing Garment Sector Wages in Cambodia

10 Oct 2022

Digitizing wages in the Cambodian garment sector has the potential to drive efficiency in the supply chain, while bringing large numbers of unbanked workers, especially women, into the formal financial system. However, paying wages digitally also requires factories to fully digitize their payroll system, which could help with audits and compliance requirements of buyers and introducing digital wages does entail a per capita fee paid to workers, factories, and financial service providers (FSPs) that facilitates the payment of wages directly into each worker’s account.

The report assesses the market potential for digital wage payments in Cambodia’s garment sector through interviews and survey with over 400 workers and managers from more than 100 factories (half of which are using digital wage payment).

This report has been produced by BSR HERproject and International Finance Corporation (IFC) under the IFC/ILO Better Work Partnership.

Key Findings

  • Switching from cash to digital wage payments can save money for factory owners.
  • Workers’ main concern is the ability to cash out from their accounts, as they still need cash for most of their financial transactions.
  • The financial infrastructure surrounding Cambodia’s garment sector is ripe for digitization, with smartphones and payroll products being readily accessible.

Key Recommendations

  • Factories and FSPs should ensure digital wages payments consider the needs of workers, especially women, including protecting their data.
  • Stakeholders should provide financial capability training and support to workers, including women, on how to use the digital services.
  • Encourage and enable merchants to accept digital payments for goods, to reduce reliance on cash, and support the commercial viability of payroll accounts.
  • Foster competition among FSPs with a system that allows workers to choose their own payroll account provider


Subscribe to our Newsletter

Keep up to date with our latest news and publications by subscribing to our regular newsletter.