Unlike other parts of the world, Pakistan continues to be primarily a cash-dominant economy. Be an average garment factory worker or a local school teacher, the majority of those working in the private sector receive their wages in the form of cash. Employees have their salaries disbursed manually, for which they line up every month on their payday to physically collect cash which they then take home.
This poses serious financial risks for both employees and employers. Employees are largely at risk for theft, miscalculations and crumpled currency notes which can significantly reduce their take-home cash; similarly, employers too face the risk of theft or fraud in wage transportation and disbursement.
Furthermore, employers spend extensive resources on administration, counting, and distribution of wages, whereas the employees have to stand in long queues for salary collection which makes the process inefficient. According to a study conducted in 2017, each worker spends approximately 18 minutes per month on physical salary collection which costs the factory an average of 750 hours lost in production per month.
In the bigger picture, cash is disempowering with less to no control over earning, especially for women. To add to the troubles, cash is also difficult to manage or save for tough financial times.
This warrants a huge scope for Digital Payments to eliminate the risks and inconveniences posed by cash dealings. As one of the leading financial institutions in the country, Bank Alfalah launched ‘Alfa Payroll Solution’ to transform wage payments in Pakistan from cash payments to digital payments, with an aim to close the financial inclusion gap for low-income groups especially women.
Group Head, Digital Banking Group at Bank Alfalah, Mr. Yahya Khan said,
With Alfa Payroll solution, our vision is to foster financial inclusion in Pakistan. The idea is to create opportunity and access across the board to reap the benefits of financial management, savings, digital payments and financing created by banking products.
Furthermore, Digital payroll would lead to financial inclusion which not only encourages growing the number of people in the tax net but also plays a significant role in eliminating the undocumented economy.
‘Alfa Payroll Solution’ is a secure, reliable and cost-effective digital solution that allows companies to disburse salaries directly into mobile accounts of hundreds and thousands of employees in one go. This system eliminates the involvement of cash. Employees don’t even need to visit the branch to open their accounts as Alfa– the bank’s App offers a digitized onboarding process with minimal documentation requirements.
Bank Alfalah’s team works directly with employers to support their transition from cash to digital payroll, and trains workers to ease their transition to digital wages, thus allowing them to receive their wages instantly and transparently into a digital account. Mobile wallets are linked with an ATM/Debit card that can be used at not just Bank Alfalah ATMs but also of other Banks’ ATMs and POS machines across the country.
In addition to this, beneficiaries also have access to various lending products out of which Bike Financing has been the most popular among payroll customers. As per the team, more than 40 bikes were financed through the Alfa Payroll Bike Financing program in just two weeks.
This reflects that Alfa does not only enable the workers to meet their financial needs in a timely manner but also gives them easy access to financing facilities to manage better living standards. Likewise, Bank Alfalah plans to launch financing options for client companies as well which would help them manage their running capital and grow their business.
At present, there are more than 200+ companies onboarded for Alfa Payroll Solution with some of the major textile and leather companies, pharmaceuticals and retail chains in Pakistan on the list, that collectively make a monthly disbursement of PKR 957 Million to 82,000+ blue-collar workers in their payroll wallets.
Businesses interested in Alfa Payroll Solution can email at [email protected].