MasterCard set to pilot digital payments to garment workers

MasterCard has announced a global effort to pay garment factory workers digitally – including in Cambodia – and ensure that they receive their hard-earned wages securely and consistently.

The firm and its partners are coordinating pilot programmes in Egypt and Cambodia with a hybrid digital payment solution, MasterCard said.

“Participating factories will have the opportunity to deposit wages directly into workers’ accounts.

“Workers can then activate debit or prepaid cards – or digital wallets – through which they can pay bills or send money directly to family and friends,” it said.

Around the world, it said, 230 million adults – nearly 85 per cent of adults in low-income countries – who work in the private sector receive their wages in cash.

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

Ministry of Labour and Vocational Training spokesman Heng Sour told The Post on Tuesday that it is too soon to implement the programme in the Kingdom, as the number of workers willing to accept payment through banks remains low.

“They [workers] can’t spend [their salaries] immediately if [they are paid] through MasterCard or banking systems as they need to go to the bank to withdraw the money.

“They also need to check whether the money has already been transferred to their bank accounts. Cambodian workers wish to see cash,” he said.

However, he said workers could benefit from the programme and learn how to save money and access the banking and financial system.

“A challenge we will face … [is that] credit cards are not widely used in Cambodia, particularly among workers – even bank cards,” he said.

MasterCard or any other credit card company that wishes to introduce such a service to Cambodians will need to explain it and give workers the option to use it – it should not be compulsory, he said.

However, by partnering with companies that use labour-intensive supply chains, including garment manufacturers, MasterCard is creating digital solutions and delivering training support to give workers more control and transparency over their earnings and savings.

MasterCard Prepaid Solutions executive vice-president Sue Kelsey said the company’s vision is to ultimately build a new ecosystem of partners – the garment industry, the technology sector, non-profit organisations, factories, banks – and work together to deliver a social impact on a grand scale.

“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,” she said.

With more than 700,000 workers employed in the industry, higher numbers of garment factory workers are shifting from cash payroll to bank accounts.

Cambodia Post Bank Plc CEO Toch Chaochek told The Post on Tuesday that the bank currently serves nearly 10,000 workers who receive their payroll via bank accounts.

“In the past, most workers got their salaries directly from their factory’s owner. But now, things have changed. Now their payments are transferred to their bank accounts.

“Now, workers who have a Cambodia Post Bank ATM card or the app can transfer money to their families and pay the electric and water bills,” Chaochek said.

Data collected from Business for Social Responsibility’s HERfinance programmes shows that garment factories that shift to digital payroll experience a 53 per cent savings on staff to count and disburse wages.

The data shows that moving to digital payments increases access to savings accounts for factory workers from 28 per cent to 43 per cent.

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