Mastercard Partners With Levi Strauss & Co., Marks & Spencer & VF Corp. on Programs to Help Garment Factory Workers Build Mor...
September 26 2019 - 8:00AM
Business Wire
Mastercard today announced a global effort to pay garment
factory workers digitally, a pivot the industry is making from
traditional cash payroll to ensure workers receive their
hard-earned wages securely and consistently. With industry partners
including Levi Strauss & Co., Marks & Spencer and VF
Corporation, and in conjunction with global nonprofit BSR (Business
for Social Responsibility), this program aims to improve the
wellbeing of factory workers who currently lack access to the
financial tools and services that can help them and their families
thrive.
Around the globe, 230 million adults – nearly 85 percent of
adults in low-income countries — who work in the private sector
receive their wages in cash. But 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.
Mastercard and its partners are coordinating pilots in Egypt and
Cambodia with a hybrid digital payment solution. 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. Providing hands-on peer
training on digital financial services, financial planning and
management, and how to discuss finances with family members can
help make workers feel comfortable and confident transacting
digitally.
By partnering with companies that use labor-intensive supply
chains, including garment manufacturing, Mastercard is creating
digital solutions and delivering training support to give workers
more control and transparency over their earnings and savings. The
ability to receive regular wage payments gives factory workers the
means to step into the world’s formal economy and can lead to a
better quality of life for them and their families. The program
also has the potential to specifically benefit women, who make up
68% of the garment worker industry, yet are often the most
financially vulnerable.
“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,” says Sue Kelsey, Executive Vice President, Prepaid
Solutions, Mastercard. “We’re committed to help digitize wages
throughout supply chains across industries and continents, turning
access into usage and in turn, fueling growth of local
economies.”
In an age where there is increasing importance placed on
sustainable practices and worker well-being, digital payroll can
also create cost savings, increased efficiency and greater
transparency for companies. Garment factories that shift to digital
payroll, for instance, experience a 53 percent savings in staff
time for the teams that count and disburse wages, according to data
collected through BSR’s HERfinance programs. And moving to digital
payments increases access to savings accounts for factory workers
from 28 percent to 43 percent.
“Mastercard is an excellent partner for a pilot program like
this, due to the infrastructure they have built around digital
payment systems coupled with our longstanding commitment to the
well-being of workers,” says Michael Kobori, Vice President of
Sustainability, Levi Strauss & Co. “We look forward to seeing
the outcomes of the pilot and hope this advances efforts to realize
the potential of digital payments to benefit workers across apparel
supply chains.”
“As the UK’s biggest clothing retailer, we recognize the
importance of collaborating with others in the industry to create
momentum and change,” says Lydia Hopton, Global Ethical Trade
Manager, M&S. “Paying people, particularly women, through a
digital solution creates economic opportunities for them and their
families, and it’s a project we’re proud to be working with
Mastercard and other global brands on. Together, we can create
sustainable change to improve people’s lives worldwide.”
The first step in maximizing the benefits of digital payroll for
women is ensuring the garment workers’ needs remain at the
forefront of product development. Access to tools is a key
component, as is usage, but research has found that 75 percent of
women garment workers do not have basic financial literacy.
A collaboration between The Mastercard Center for Inclusive
Growth and BSR, the global nonprofit that works with businesses to
integrate sustainability into their strategy and operations,
supports the digital payroll initiative through BSR’s grassroots
HERfinance Digital Wages education program. HERfinance is one
pillar of HERproject, the leading workplace-based women’s
empowerment program in global supply chains, which has empowered
more than one million workers with knowledge and skills on health,
financial inclusion and gender equality since 2007.
“Digitizing wages is an area where companies can make relatively
small investments and have huge positive impacts, especially for
low-income women workers,” says Christine Svarer, Director,
HERproject. “But to realize these positive impacts, it is vital to
ensure that workers have the skills and knowledge to benefit from
the transition and that factories are supported during the process.
We are delighted to be partnering with The Mastercard Center for
Inclusive Growth and leveraging our experience in this space to
make digital wages a success story.”
About Mastercard
Mastercard (NYSE: MA), www.mastercard.com, is a technology
company in the global payments industry. Our global payments
processing network connects consumers, financial institutions,
merchants, governments and businesses in more than 210 countries
and territories. Mastercard products and solutions make everyday
commerce activities – such as shopping, traveling, running a
business and managing finances – easier, more secure and more
efficient for everyone. Follow us on Twitter @MastercardNews, join
the discussion on the Beyond the Transaction Blog and subscribe for
the latest news on the Engagement Bureau.
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Alyssa Rosenblatt alyssa.rosenblatt@mastercard.com
914.249.1564
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