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H&M encourages suppliers to pay workers digitally

H&M is the first global fashion brand to join the United Nations’ Better Than Cash Alliance, which aims to accelerate the transition from cash to digital payments.

The Swedish fast fashion giant said it will encourage its suppliers to pay workers through mobile or other digital forms to speed up the process, improve transparency and cut factory costs.

The alliance examined a selection of garment manufacturing factories in Bangladesh that have transitioned workers’ wage payments from cash to digital over the past five years and found it can save factories around 750 hours of production a month, due to workers spending less time away from the production line. It can also reduce costs by more than 85% within two years of paying workers via a hybrid mobile money/bank account model.

“Digital payments are an efficient and scalable way to improve the lives of the employees of our suppliers,” said Gustav Loven, social sustainability manager at H&M Group. “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.”

 

Readers' comments (1)

  • In an ideal world this would be perfect - but if you live in village outside Dhaka, are 16 and female, your bank account will run by your father or older brother and you won't see a dime - even if you're allowed an account- it's an age-old problem: in Tamil Nadu it's common for the big factories to have cash machines: the women hide the cash cards, withdraw the cash - they hold back some of the money earned, to make sure the children have some food - no Apple pay here. Only apples and onions!

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