[Egypt] Mastercard partners with Levi Strauss & Co to digitize wages of 10,000 garment factory workers
Mastercard has announced a global effort to pay garment factory workers digitally, a pivot from traditional cash payroll, to ensure they receive their hard-earned wages securely and consistently.
With industry partners including Levi Strauss & Co., Marks & Spencer and Vanity Fair Corp., and in conjunction with global nonprofit BSR (Business for Social Responsibility), this program aims to improve the wellbeing of factory workers – a community of millions in the developing world – who currently don’t have access to the financial tools or services that can help them and their families thrive.
As a pilot in Egypt, Mastercard and Levi Straus & Co. have united to digitize the wages of over 10,000 garment factory workers in Port Said as part of a joint effort to drive financial inclusion and economic security.
In partnership with CIB, Mastercard will roll out a hybrid digital payment solution to enable these workers to access funds, make payments and manage their money through a debit card and a mobile wallet.
The factories will deposit wages in the workers’ accounts, and workers will be able to activate digital wallets through which they can pay for products, services, and bills, send money directly to their families and friends, as well as have access to cash in a convenient manner.
The initiative is a step forward in Mastercard’s financial inclusion commitment to reach 500 million people previously excluded from financial services by 2020.
Mohamed Assem, Mastercard’s Country Manager for Egypt, commented on this announcement, stating: “This groundbreaking initiative is Mastercard’s way of ensuring that garment workers are empowered and provided with the same opportunities of financial inclusion afforded to the rest of society.
By participating in cashless systems, workers will increase their purchasing power and gain better representation in the formal economy. This program supports the national efforts in Port Said made by the government to digitize all financial transactions and create a secure economic landscape that benefits every citizen.”
“As Egypt takes solid strides towards a digital economy, we are pleased to be part of this innovative pilot. Empowering our workers with digital payment solutions will facilitate their daily payments in a safe, easy and convenient manner, as well as help them better manage their finances. We are proud to collaborate with industry leaders and look forward to making a sustainable change in the lives of our workers by creating endless economic opportunities for them and their families,” said Tamer Eldesouky, Sustainability Manger of Lotus Garments, the company manufacturing garments for Levi Strauss in Egypt.
The garment industry is one of the most distinctive industries in Egypt accounting for 3% of GDP, 27% of the industrial output and 10% of total exports, which reached $534.8 million as of the third quarter of 2018. The industry benefits from many competitive advantages in Egypt, such as increased labor supply and lower wage rates, compared to other countries.
Due to the significant challenges created by cash-based payments, garment factory workers are excluded from benefiting from the current electronic improvements made towards bill payments. Additionally, beneficiaries of this initiative are no longer susceptible to theft which is a common byproduct of cash wages.
By partnering with companies that manage labor-intensive supply chains, including garment manufacturing, Mastercard is introducing a digitization program with training support, to help factory workers onto a sustainable path to a more secure financial future. By linking payroll to banking apps and digital wallets, regular payments can help tens of thousands of people step into the world’s formal economy.
“Mastercard is an excellent partner for a pilot program like this, due to the infrastructure they have built around digital payment systems coupled with our longstanding commitment to the well-being of workers,” says Michael Kobori, Vice President of Sustainability, Levi Strauss & Co. “We look forward to seeing the outcomes of the pilot and hope this advances efforts to realize the potential of digital payments to benefit workers across apparel supply chains.”
The Egyptian garment industry employs one and a half million workers, representing 30% of the workforce in Egypt, and with over 68% of global garment workers being women, Mastercard’s program provides a profound objective. In addition to ensuring workers are supported through the use of digital payments, the Mastercard Center for Inclusive Growth and BSR’s HERfinance Digital Wages education program have partnered up with the specific aim to empower women in the garment industry.
HERfinance Digital Wages is part of the HERproject, a leading workplace-based program in global supply chains that equip women with the tools necessary to take charge of their careers through proactive workshops based around knowledge and skills on health, financial inclusion and gender equality.