World Economic Forum (WEF) has appreciated the inclusion of digital wage payments in apparel sector in Bangladesh mentioning that the tool helps workers, not only to have better control over wages but also to access other financial services.
In a recent study paper, the WEF described the way digital payment systems can boost Bangladesh to meet the sustainable development goals (SDGs).The global platform also mentioned that Bangladesh RMG sector has now embraced digital payments in a big way as the logical next step.
“In the wake of the pandemic, promotion of digital payment technology have now become of enormous value,” read the study paper published on Friday.
The WEF further mentioned that Digital wage payments enable companies to minimise human interactions during financial transactions.
Digital payments help address health concerns, reduce travel, and have kept markets and other commercial establishments less crowded, it added.
The recipients of digital money, in turn, spent more through digital means, such as in sending remittances and making other payments. They also increased their savings and ability to cope with unanticipated economic shocks, it added.
In November 2019, the government of Bangladesh, global garment brands, the International Labour Organization(ILO) and Better Work came together and committed to removing barriers to ensure that 90 percent of wages in RMG factories were paid digitally by 2021.“Ironically, an unexpected boost came from the restrictions imposed because of the pandemic conditions. At the peak of the pandemic, in July last year, 87 percent of wage payments were digital,” mentioned in the WEF study paper.
This aligned with the government’s larger efforts to provide a stimulus package of Tk 50 billion to maintain employment and pay workers’ salaries in export-oriented sectors particularly RMG.
All RMG factories had to digitise their payroll systems and submit mobile accounts of their workers if they wanted to access the stimulus funds. As a result, in two weeks of April alone, a whopping 1.92 million mobile accounts were opened.