The Better than Cash Alliance, a program of the UN Capital Development Fund, conducts research and assists governments and regions develop inclusive digital ecosystems that promote transparency, efficiency, and financial inclusion. Gap, Inc., the global clothing company, has recently joined with the Better than Cash Alliance to promote financial inclusion for the mostly female garment worker population.
Gap has over 800 factories in 30 countries as tier 1 suppliers. Their goal to promote sustainable development and financial inclusion is for these tier 1 suppliers to have digital payments for their workforce in place by 2020. At this time, Gap estimates that 60% of the factories they work with currently offer some digital payments to workers.
Many women who work in the garment industry live in cash-only environments and do not have access to formal financial services. By drawing them into the formal financial systems through digital payments, they could have the opportunity to save, invest, send money, and build credit.
Gap and the other companies working with the Better than Cash Alliance to promote financial inclusion hope to increase transparency through the supply chain, a business value that has become increasingly important to consumers. In addition, they promote the values that sustainable development and environmental stewardship, in addition to supply chain transparency, are ways of doing business that are compatible with for-profit businesses.
The Better than Cash Alliance worked in parallel with the G20 High Level Principles for Digital Financial Inclusions to develop their framework best practices document, 8 Good Practices for Digital Payment Ecosystems. These guidelines are specifically addressed to financial services for those who have been underserved or financially excluded, and provide guidance for both regulatory agencies and financial service providers.
Consumers who are new to financial systems are concerned with loss of privacy and exposure to fraud, as well as feeling unable to advocate for issues such as high or unexpected fees. Sound regulatory frameworks and consumer protections, built into a new ecosystem for digital payments specifically for those who have been excluded or underserved, is a critical first step for regulatory agencies.
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