Gap to digitise payments for all tier 1 suppliers by 2020

By James Henderson
Gap has pledged to make the transition from a cash-based system to digital payments for its tier 1 suppliers by 2020 – incorporating approximately 800...

Gap has pledged to make the transition from a cash-based system to digital payments for its tier 1 suppliers by 2020 – incorporating approximately 800 factories in about 30 countries.

The company said the move will improve the livelihoods of garment workers and help improve supply chain transparency and efficiency.

More than 60% 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.

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“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.”

In a release, Gap said 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.

It added: “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.”

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