The company said in a statement Wednesday that it will transition from paying its garment workers on a cash-based system to digitizing their wage payments by 2020. The move is expected to impact more than 1 million garment workers employed in Gap’s roughly 800 factories in 30 countries.
At present, more than 60 percent of Gap Inc.’s supplier factories already pay their employees using digital payment methods, like online transfers to accounts and mobile wallets. This new plan expands the process across the company’s global supply chain.
“At Gap Inc., we believe that good business practices can help change the world and fuel growth,” said David Hayer, senior vice president of Global Sustainability at Gap Inc. and president of Gap Foundation. “By having our suppliers pay garment workers digitally, we aim to accelerate the transition toward a more transparent workplace for the women and men who make our clothes. It’s a win-win for garment workers and factories alike.”
Factories benefit from digital payment systems because they are more efficient and cost effective. And for female garment workers—who make up about 80 percent of the garment industry workforce worldwide—it helps them gain control over finances, and offers easier ways to save, send and invest money.
To speed up the transition, Gap Inc. has joined forces with the United Nations-based Better Than Cash Alliance, a partnership of government, companies and international organizations that support digital payment systems as an effective way to reduce poverty and drive inclusive growth.
“The scale, innovation and leadership of the private sector is critical to creating economies where all people benefit from digital financial services,” Dr. Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance, said. “Gap Inc. is one of the global brands leading the way when it comes to digitizing workers’ payments in the garment sector. Its commitment today will continue the movement across the retail sector to improve lives, increase transparency and drive business benefits through digital payments, and contributing to the Sustainable Development Goals.”
Gap has long been an advocate of programs that improve the livelihoods of garment workers. For more than 10 years, the company has promoted financial literacy and inclusion through P.A.C.E. (Personal Advancement & Career Enhancement), its life-skills education and training programs for women working in the garment industry.