H&M joins Better Than Cash Alliance
The retailer says it will encourage its suppliers to pay their workers through mobile money or other digital forms to improve the livelihoods of its workforce, enhance transparency and cut factory costs.
The Better Than Cash Alliance is a partnership of governments, companies and international organisations aiming to accelerate the transition from cash to digital payments.
“Digital payments are an efficient and scalable way to improve the lives of the employees of our suppliers,” says H&M social sustainability manager Gustav Loven. “They offer a faster, safer and more transparent way for people 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.”
Of the 1.6 million people employed along H&M’s supply chain, 65 per cent are women, many with limited access to the financial services they need to create a better life for themselves and their families. Many factory workers worldwide are paid entirely in cash, which entails cumbersome, expensive and dangerous processes for both factories and workers.
Encouraging suppliers to pay wages through digital channels, such as bank accounts, cards or mobile money, will build on H&M’s sustainability commitment to work with its business partners to promote good working conditions, fair living wages and sustainable economic growth.
“H&M’s leadership will help inspire other companies in the industry, and beyond, to make the shift to digital payments,” says Better Than Cash Alliance MD Dr Ruth Goodwin-Groen.
Expanding digital payments to the world’s cotton supply chain could potentially reach 250 million people, including smallholder farmers who have limited access to digital payment systems and financial services in general.
This story was first posted on Inside Retail Asia.