Digitizing Wage Payments in Bangladesh’s Garment Production Sector

Case Study published March 8, 2017

Digitizing Wage Payments in Bangladesh’s Garment Production Sector

The journey from cash to electronic payments in Bangladesh’s garment sector is gathering pace as garment production factories discover how digitizing wages can save time, reduce costs, increase transparency and empower workers by improving their access to finance. In short, electronic payments have the potential to help companies improve their bottom line while making life better for workers.

To help guide garment producers in the transition to electronic wage payments, and provide more insight for international garment brands, the Better Than Cash Alliance commissioned a survey of garment factories in Bangladesh that have already introduced electronic wage payments. The survey, carried out by the World Bank, quantified the cost and time savings of digital payments compared with cash, and measured employees’ payment preferences, based on interviews and self-reported data shared by 21 factories in Bangladesh. It is the first of its kind to document key data points on the costs and benefits of wage digitization from a factory perspective. It will be augmented by further research, especially regarding the impact of wage digitization on workers’ access and use of financial services, as well as business models for financial service providers.

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