Blog: Wage Digitization – A Win-Win for Women Workers and Enterprises in Vietnam

July 30, 2020

By Nithya Sharma, Manager, Strategy, at Women’s World Banking

Over the past decade, Vietnam’s economy has been surging – with strong GDP growth, a reduction in poverty, and an increase in formal employment to 30% of the active labor force.[1] Vietnam also has a thriving digital economy, with a regulatory focus on building a cashless society, rapid growth of new providers in the markets (e.g., Fintechs), and a high rate of mobile penetration.

However, despite these advances, 70%[2] of women in Vietnam are still unbanked. Also, even as Vietnam has one of the highest rates of female labor force participation at 79%,[3] a significant majority (60%)[4] of Vietnam’s formal workforce still receive wages in cash.

In our recent report, From Cash to Digital Wage Payments in Vietnam: Win-Win for Enterprises and Women Workers, Women’s World Banking, in partnership with the International Labour Organization (ILO), highlights that wage digitization has the potential to not only drive business efficiency for enterprises, but it can substantially increase women workers’ financial inclusion and economic empowerment.

Making the Case for Digital Wage Payments

For women workers, digital payments reduce the risk of holding cash – i.e., theft and overspending – and provides a safer, more secure way to save and plan for the future. One Vietnamese garment factory worker shared that after paying her rent and other expenses that she keeps the rest of her salary in her account. She explained it is not only safer there, but when she goes shopping then she need not take much cash with her.

For enterprises, switching to digital wages reduces the manual processes to calculate payroll and efforts needed to arrange cash payments, resulting in cost and operational efficiencies as well as increased accuracy and transparency. A Vietnamese garment factory saw the benefits of shifting to digital wage payments because of a reduction in manpower and costs required. Digital payment also allowed the factory to keep from miscounting wages and pay their workers their full amount of salary.

Barriers to Digital Wage Payments

Although both enterprises and women workers recognize the benefits of digital wage payments, key challenges must be overcome in order to drive active usage of these accounts.

For women workers, the key barriers to adoption of digital wage payments are:

  • Lack of trust and knowledge to use a new technology
  • Lack of accessibility
  • High fees and transaction costs associated with digital accounts.

For enterprises, the key barriers to adoption of digital wage payments are:

  • Updating infrastructure and training
  • Resistance from workers to switch
  • Lack of a standardized approach and guidance on best practices to digitization.

In Vietnam, digital wage payments will not only increase enterprise productivity and growth but also pave the path to greater financial inclusion of women workers. As the COVID-19 crisis has shown, establishing a strong digital ecosystem can help governments scale up social protection payments, businesses to grow new channels to reach customers and employees, and low-income women access financial products and services to support their resilience and recovery from global economic shocks.


1 “Decent Work and the Sustainable Development Goals in Viet Nam: Country Profile”. International Labour Organization (ILO) (2019)
2 World Bank Global Financial Inclusion database (2017)
3 World Bank World Development Indicators (2019)
4 World Bank Global Financial Inclusion Database (2017)