In a move to improve the livelihoods of garment workers and help improve supply chain transparency and efficiency, Gap Inc. has announced a bold new goal for all of its tier 1 suppliers – approximately 800 factories in about 30 countries – to make the transition from a cash-based system to digital payments by 2020.
More than 60 percent of Gap Inc.’s supplier factories already provide digital payments methods, such as online transfers to bank accounts or mobile wallets. The new goal will help scale this progress across the company’s global supply chain and positively impact the lives of more than one million garment workers.
“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 towards a more transparent workplace for the women and men who make our clothes. It’s a win-win for garment workers and factories alike.”
Women make up about 80 percent of the world’s garment industry workforce but often live in a cash-only environment and lack access to formal financial services. Electronic wage payment methods have the benefit of drawing previously unbanked workers into the formal financial system, allowing women greater control over their finances and a safer way to save, send money, and invest. At the factory level, suppliers benefit from cost savings, due to increased efficiency and speed. All parties also benefit from increased accountability, transparency, and security.
To help achieve this bold new commitment, Gap Inc. also announced that it has joined the United Nations-based Better Than Cash Alliance, a partnership of governments, companies, and international organizations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth.
“We’re pleased to join the Better Than Cash Alliance to help drive this important progress forward,” added Hayer. “We encourage others across the apparel industry to join us in this effort.”
“The scale, innovation, and leadership of the private sector are critical to creating economies where all people benefit from digital financial services,” commented Dr. Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance. “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.”