Bangladesh plans to bring its 3.6 million garment workers under a digital wage system by 2021.
Already 1.5 million garment workers receive their wages under the digitised system. Another 2.6 million will soon join them. Transitioning from cash is expected to significantly increase the security and efficacy of payments not only by saving time handing out payments but also minimising productivity disruptions on payday.
Using digital and electronic payments instead of cash has the potential to empower workers by improving their access to financial services, savings, credit and insurance.
This, in turn, can result in additional economic opportunities and independence, particularly for the women who make up 80 per cent of Bangladesh’s garment workforce. Women in Bangladesh with digitised wages are half as likely to report handing their salaries over to their spouses on a monthly basis. Shifting from cash to digital payments also improves the likelihood of women participating in household financial decisions by 15 per cent. By ensuring traceability of the payment process, digital payments are also expected to reduce corruption, fraud and theft and make it easier to check compliance with core labor standards and to measure how factories comply with ILO’s decent work agenda in relation to living wages.