Gap Wants Its Top Suppliers To Ditch Cash Payments to Workers by 2020

Apparel and accessories retailer Gap Inc. wants its leading suppliers to stop paying workers in cash by 2020 and instead pay them digitally.

San Francisco-based Gap, which had nearly $16 billion in sales last year and owns the Old Navy, Gap, Banana Republic, and Athleta brands, said this week that it set the digital-payments goal for all of its so-called tier 1 suppliers, which operate approximately 800 factories in 30 countries. More than 60% of Gap’s supplier factories already provide digital-payment methods, including online transfers to bank accounts or mobile wallets, a Gap news release says.

“The new goal will help scale this progress across the company’s global supply chain and positively impact the lives of more than 1 million garment workers,” the company said.

Gap said women comprise about 80% of the garment industry’s workforce, and they often live in countries with cash-based economies and little access to mainstream 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,” the company said.

As part of the initiative, Gap said it had joined the Better Than Cash Alliance, a United Nations-based partnership of governments, companies, and international organizations that promotes the transition from cash to digital payments in order to reduce poverty and promote economic growth. Funders of the 60-member Alliance include Visa Inc. and Mastercard Inc.

A Gap spokesperson was unavailable Friday for further comment.