While more than 60% of Gap’s supplier factories already provide digital payments methods, the retailer says its new goal will help scale this progress across its global supply chain and positively impact the lives of more than 1m garment workers

While more than 60% of Gap’s supplier factories already provide digital payments methods, the retailer says its new goal will help scale this progress across its global supply chain and positively impact the lives of more than 1m garment workers

Gap Inc is encouraging all 800 of its tier 1 supplier factories to pay garment workers digitally by 2020, in a move that will 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.

But the retailer says 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 in around 800 factories in an estimated 30 countries.

To help achieve its target, the retailer has also joined the Better Than Cash Alliance, a UN-based partnership of governments, international organisations and companies working to accelerate the transition from cash to digital payments for workers' wages globally in order to reduce poverty and drive inclusive growth.

"At Gap, we believe that good business practices can help change the world and fuel growth. 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," says David Hayer, senior vice president of global sustainability at Gap and president of Gap Foundation.

Women make up about 80% 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.

The company's focus on promoting an inclusive digital payment ecosystem is its latest move to partner with suppliers to improve the livelihoods of the garment workers who make its clothing.

For over ten years, Gap has also promoted financial literacy and inclusion through its life-skills education and training program for female garment workers, P.A.C.E. (Personal Advancement & Career Enhancement). The programme's holistic curriculum also includes topics such as communication skills, time and stress management, problem-solving and decision-making.

According to the retailer, P.A.C.E.'s evaluation results have demonstrated that the programme directly improves the lives of women and their families by developing women's knowledge, skills and confidence. It also has a strong track record for reducing garment worker turnover and absenteeism, a key return on investment measure for suppliers that participate in P.A.C.E. across 16 countries.

"The scale, innovation and leadership of the private sector is critical to creating economies where all people benefit from digital financial services," says Dr Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance. "Gap is one of the global brands leading the way when it comes to digitising workers' payments in the garment sector.

"Its commitment 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."