Swedish fashion brand H&M is encouraging its suppliers to pay their workers digitally through mobile money or other digital forms, rather than cash, after becoming the first fashion brand to join the United Nations’ Better Than Cash Alliance.
The brand aims to improve the lives of nearly 2 million workers by paying workforces digitally, thus enhancing transparency, cutting factory costs and promoting good working conditions, fair living wages and sustainable economic growth.
“Digital payments are an efficient and scalable way to improve the lives of the employees of our suppliers. They offer a faster, safer and more transparent way to receive their salary, increase financial inclusion and support women’s economic independence. Also, for our suppliers, paying wages digitally can generate savings, increase security and provide more accurate data on wages,” said Gustav Loven, Social Sustainability Manager, H&M.
It may be noted that a round 65 per cent of the 1.6 million people employed in the H&M group’s supply chain are women and many of them have limited access to the financial services needed to improve their lives, with many factory workers worldwide paid entirely in cash.
A research from the Better Than Cash Alliance reveals that Bangladesh garment manufacturing factories transitioning to digital payments can save approximately 750 hours of production a month, due to workers spending less time away from the production line and can reduce costs by more than 85 percent within two years by paying workers via a hybrid mobile money/bank account model. At the same time, it brings previously unbanked workers into the financial system and builds financial skills
Better Than Cash Alliance is a United Nations-based partnership of governments, companies and international organizations accelerating the transition from cash to digital payments.