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Scaling responsible digital payments across the garment sector

2 Dec 2019

A new partnership between the International Labour Organization – including Better Work – and Better Than Cash Alliance will result in promoting digital payments as an important tool to increase security, financial inclusion and economic opportunities in the workplace.

By joining the United Nations’ Better Than Cash Alliance, the International Labour Organization (ILO) commits to increasing the use of responsible digital payments to boost financial inclusion, transparency and efficiency.

Specifically, the partnership will support the extension of affordable and accessible payments to low-income people, the creation of cost savings, increased transparency and security, the promotion of decent work, economic development and the broadening of financial inclusion.

The announcement was made today at the Bangladesh’s Digital Payment Summit, which brought together public and private sector actors to step up efforts on scaling wage digitization in the garment sector.

The Better Than Cash Alliance will be working, in particular, with the ILO’s Social Finance team, as well as with Better Work – a flagship programme of the ILO, jointly managed by the International Finance Corporation, that improves working conditions and business practices across the global garment industry.

The organizations will focus their work on four priority countries to assess the opportunities and challenges of promoting salary payments and social protection transfers. One of the first steps will be engaging key stakeholders in Jordan’s garment sector to design a roadmap that promotes responsible wages digitization. Jordan is home to more than 68,000 garment workers, 75 percent of whom are women. The vast majority of these workers still receive their monthly salary in cash from the factories, limiting their capacity to access financial services, remittances and savings.

Dan Rees, Better Work Director, said:

“Digital wage payments have the potential to drastically reduce administrative cost and worker time off production lines, while promoting enhanced financial inclusion and financial capabilities of workers.”

Craig Churchill, Chief of Social Finance Programme, ILO Geneva, said:

“The ILO celebrates its centenary this year. For the past 100 years, the ILO has been promoting social justice and decent work. In this very special year for us and, in a context of a changing world of work, we strongly believe that the adoption of responsible digital payments has the potential to advance the ILO’s Decent Work agenda. We are exploring how the transition to digital payments in small and medium-sized enterprises, as well as in large enterprises and factories, can contribute to enhancing enterprises’ productivity and sustainability. At the same time, the digital payment of wages in particular is most likely to promote labour rights, encourage formalization of employment and boost financial inclusion of workers. Finally, we do believe that digital payments can contribute to extending social protection to millions of workers around the world. As a new member of the Alliance, we will seek to promote actively responsible digital payments in the world of work.”

Dr. Ruth Goodwin-Groen, Managing Director of the Better Than Cash Alliance, said:

“The ILO and Better Work are achieving real progress in making payments responsibly and advancing the Sustainable Development Goals. We look forward to working closely with them to benefit employees, employers and governments alike.”

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