Digital payments are an effective and sustainable payroll solution that greatly benefit employers and workers (both male and female). These benefits were particularly evident during the COVID-19 pandemic, which subsequently created interest around wage payments across the industry. Digitizing wages in the Cambodian garment sector has the potential to drive efficiency in the supply chain, while bringing large numbers of unbanked workers, especially women, into the formal financial system. Furthermore, digital payments can enable women’s economic empowerment.
This report presents the results from research that was conducted in Cambodia in December 2020 — January 2021. The focus of the research was on the potential market for worker payroll digitization, through direct payroll deposits into workers’ financial accounts (henceforth “digital wages”), in Cambodia’s garment sector. The research sought to understand the interests and concerns of the market’s three main stakeholders—workers, factories, and financial service providers (FSPs). In order to fully understand the potential benefits and challenges that a shift to digital wages might present to workers, the research also considered the context of the ecosystem that includes other economic actors, with a particular focus on those who conduct transactions with garment sector workers.
The report finds that digital wages can bring efficiencies in the garment supply chain that benefit both employers and workers. Factories are benefiting from digital wage payments, which reduces the need for factory staff to secure and disburse wages in cash. Paying wages digitally also requires factories to fully digitize their payroll system, which could help with audits and compliance requirements of buyers. However, introducing digital wages does entail a per capita fee paid to FSPs that facilitates the payment of wages directly into each worker’s account.