Rapid Assessment on Digital Wage Payments for Decent Work in Cambodia’s Tourism and Agro-Processing Sectors

Introduction and Background

Globally, an estimated 165 million workers without bank accounts receive private sector wages solely in cash. Additionally, millions more are paid digitally into accounts that do not meet their financial needs. In Cambodia, 75 per cent of private sector wage payments were made in cash in 2021, with over two-thirds of government payments also disbursed in cash.[1] However, a significant shift towards digital wage payments is underway. This transition to responsible digital wages offers the potential to foster business efficiencies, promote worker rights and business formalization, and advance financial inclusion.

The ILO established the Global Centre on Digital Wages for Decent Work to accelerate the transition from cash to responsible digital wage payments. The Global Centre seeks to enable women and men workers around the world to have better control over their wages and use worker-centric digital financial services for better resilience and economic opportunities. In the first phase of its interventions in Cambodia, the ILO’s Global Centre on Digital Wages for Decent Work and Better Factories Cambodia focused on supporting Cambodia’s garment, footwear, and travel goods sector (GFT) to promote a responsible transition to digital wage payments. The project partnered with sectoral employers’ organization: TAFTAC, the Ministry of Labour and Vocational Training, trade unions, international brands and buyers, local and international development partners to raise awareness on digital wages, facilitate the buy-in from the stakeholders and provide needed support to factories and workers in their transition to digital wage payments.

As a result, wage digitization in export factories has increased from 50 per cent in early 2022 to 75 per cent as of December 2024.[2] Now, more than 550,000 workers in over 700 export factories receive their wages through digital accounts, with the percentage of workers cashing out their entire wages on payday has dropped from 40 per cent[3] in 2021 to 20 per cent in 2023, and workers have expressed greater confidence in using digital accounts and higher trust toward their employers.[4] This progress resulted from extensive awareness-raising campaigns, knowledge sharing, training, factory advisory services, and financial education for workers, including factory-led financial literacy campaigns, a chatbot-based solution, and a conducive digital financial ecosystem.

The evidence is clear that when managed responsibly, digital wages have led to improved efficiency, reduced payroll costs, enhanced safety, better protection of wages, and improved access to financial services for both employers and workers. The ILO’s experience in other countries including Indonesia and the Philippines has shown that the transition to digital wage payments also brings benefits to micro and small enterprises and their workers in other economic sectors. By digitizing their wage payments, these companies save time and costs, improve efficiency and transparency of their payroll processes, and unlock a broader array of formal financial services for themselves and their workers. In some cases, wage digitization helps employers to establish records for their workers and register them to national social security systems, leading to their formalization.

Cambodia has more than 700,000 non-agricultural establishments, collectively engaging approximately 2.99 million persons.  This employment landscape is diverse, encompassing various sectors, enterprise sizes, and a high rate of informality. One-third of this workforce is employed in the GFT sector and is well underway in transitioning to digital wage payments. The remaining two-thirds of the 2.99 million people (1.99 million) are engaged in other economic sectors and/or presumably smaller enterprises. Approximately 99.8 per cent of the total number of establishments are MSMEs, and the vast majority are micro-establishments (less than 5 employees). Enterprises that employ between five to 100 people account for 51,854 establishments, employing a total of 627,730 workers, many of which operate in the accommodation and food service activities, and manufacturing sectors. This context presents a unique opportunity to advance the digitization of wage payments in these establishments, thereby strengthening sustainable enterprises and empowering their workers.

The Cambodian Federation of Employers and Business Associations (CAMFEBA) plays a key role in driving change as Cambodia’s leading employers’ federation. Representing over 2,500 enterprises across sectors and 1.1 million workers, its members include business associations, chambers, non-profits, and private companies. Through its strategic plan, CAMFEBA promotes a competitive business environment and sustainable economic growth. Digital wage payments support this vision by enhancing operational efficiency, advancing digital transformation, and improving financial inclusion for workers.

Recognizing this opportunity and building on the lessons learnt from Cambodia and other countries, Better Factories Cambodia, the ILO's Global Centre on Digital Wages for Decent Work, and CAMFEBA jointly organized an engagement workshop in March 2025. The workshop brought together relevant stakeholders and representatives from key industries to discuss how other economic sectors could leverage the potential of digital wage payments. Participants acknowledged the benefits of digital wage payments for enterprises and for workers' financial inclusion. They recommended an assessment to gauge current levels and practices in sectors such as tourism and agro-processing sectors and understand the possible barriers that establishments and their women and men workers face in adopting digital wage payments.

Tourism and agro-processing sectors are key drivers of the country’s economy. In 2024, Cambodia’s tourism sector contributed 9.4 per cent to its gross domestic products and comprises 13,876 licensed tourism enterprises nationwide, employing approximately 510,000 individuals[5]. According to Cambodia’s economic census 2022, enterprises engaged in the accommodation and food service activities engaged approximately 106,977 people. These enterprises include, but are not limited to, tourist accommodation services, including hotels and guesthouses, resorts, restaurants, tour operators, tourist transport, and other services. Equally important, Cambodia’s agro-processing sector is diverse, covering rice milling, cassava, sugar, fruits, fish, meat, and cashew nut processing, with around 28,966 SMEs involved in food and beverage production as of 2023[6]. A standout example is cashew nuts—Cambodia is the world’s second-largest producer, contributing 22% of global output in 2024 with over 800,000 tons harvested from more than 500,000 hectares of dedicated farmland, involving about 236,000 farming holdings. Less than 10% is processed locally by just 40 to 59 enterprises, however as the sector grows, it is likely to evolve. If fully processed domestically, the sector could generate 37,800 to 52,500 jobs, depending on production methods[7].

Objectives

The objective of the rapid assessment is to better understand the digital wage payment practices and the barriers that enterprises operating in the subset of tourism and agro-processing sectors are facing. The assessment is expected to inform the ILO, CAMFEBA, and relevant stakeholders about the needs and areas of intervention to support the sectors in accelerating responsible digital wage payments. The assessment will also inform the development of CAMFEBA’s next strategy plan (2026-2030).

The rapid assessment aims at providing further information and analysis on the following issues:

• The current economic, financial, and social environment of the enterprises in the selected sectors
• The enterprises’ level of awareness, use and acceptance of digital wage payments, their technology capability, experience, and their aspirations
• The enterprises perceived and actual costs and benefits of various payroll models (cash vs digital)
• The current perceptions of women and men workers including awareness and comprehension of digital wage payments, customer journey, and technology use and adoption.
• The factors that explain the lack of transition to responsible digital wage payments (at the level of the enterprises, workers, financial ecosystem) and how they can be addressed adequately

Methodology

The research will combine the following approaches:

(i) Desk review: The desk review contributes to understanding the profiles of businesses in the subsets of tourism and agro-processing sectors, including the geographical areas, numbers, sizes, and employment patterns of enterprises in the industries identified in the scope of this study. The results of the review will inform the selection of specific sub-sectors and enterprises to be included in the scope of the assessment and data collection.

(ii) In-depth interviews with approximately 15 enterprises. The sample includes preferably small and medium sized enterprises and enterprises, headed by women or with women in leadership positions, and engaged in the accommodation, food services, manufacturing sectors. The sample will include enterprises that vary in terms of locality, economic activity, size, and cash vs. digital wage payment systems.

The selected enterprises will be defined with the support of CAMFEBA and its members, ILO Global Centre on Digital Wages for Decent, and Better Factories Cambodia. Data collection with enterprise owners and/or managers helps assess enterprise characteristics, sustainable business practices, understanding of responsible digital wage payments, and current and anticipated wage payment methods and practices. It gives specific attention to the payroll model, the costs of digital and cash-based payroll services, perceived challenges and benefits, willingness to transition, and insights into the preference for cash wages in case of unwillingness. It provides an analysis of the relationship between enterprise size and cash vs. digital wage payments and the implications of the transition for enterprise performance and sustainability as well as workers’ rights and wellbeing, considering different categories of enterprises and workers

(iii) Focal group discussions with around 50 workers. Participants in the focal discussion groups will be selected from among the 15 enterprises that are interviewed. The sample of workers will include various categories of workers, including along gender and cash vs. digital wages lines, permanent vs casual employments status, as well as other relevant lines such as occupation, national origin, age, marital status, family responsibility status, and disability status.

Data collection with workers helps further understand wage payment practices from a decent work perspective, as well as workers’ financial situation and financial management practices. It informs an analysis of workers’ financial inclusion, access to and use of financial services from formal financial service providers such as banks, microfinance institutions, and mobile money service providers, use of informal financial services, savings behaviors, savviness and concerns about digital finance, digital payments, and acceptance of digital payments. It also elucidates workers’ understanding of responsible digital wage payments, considering their financial and digital literacy, understanding of consumer protection issues, factors influencing technology use and adoption, and dynamics of household financial decision-making.

(ii) Interview with key informants (Tentative: 12 KI interviews). Key informants include representatives of government institutions, workers’ and employers’ organizations at the sectoral and local levels, as relevant, financial service providers, development partners, as well as experts on enterprise development.

Data to collect includes details on enterprise profiles, wage characteristics, wage payment methods and practices, digital payments, business digitalization, willingness and ability to transition to responsible digital wage payments, as well as perceived and actual costs, benefits, opportunities, and risks of the transition.

The research will be based on similar research work conducted in various countries including in Cambodia in collaboration with IFC and BSR, in Jordan in collaboration with the  UN  based  Better Than  Cash Alliance,  or  in Viet  Nam  and the Philippines  in collaboration with Women’s World Banking, as well as more recent assessments on digital wages for decent work conducted in Indonesia, Kenya, and Peru. The research team will be expected to review and build on the various recent publications and other resources on digital wage payments in the garment sector in Cambodia, which already provide detailed information on the financial sector landscape, the policy and regulatory frameworks (wage payments, financial inclusion, consumer protection), and the common challenges to adoption by workers and enterprises.   

The research tools will build on existing relevant tools to conduct research with workers and enterprises and will be adapted to the context in close consultation with the research partners (CAMFEBA, ILO, Better Factories Cambodia).

Deliverables

The Assessment team will be expected to produce the following deliverables:

1. A research plan including a summary, background and rationale, objective and specific aims, key assumptions, key findings from the desk review, research design and methods, data collection tools, list of key informants and sample of enterprises, ethical considerations, timetable, expected results, and expected impact. The sample of enterprises includes enterprises of different sizes in the suggested sectors.
2. A draft assessment report analysing prospects for the transition to responsible digital wage payments in the studied economic sectors, considering the various interests and ideas of government officials, employers, workers, financial service providers, and other stakeholders. The report details research results and insights into the level and practice of wage digitization, the costs, benefits, risks, opportunities, and distributional implications of the transition for employing enterprises, their workers, government institutions, payment service providers, and other financial service providers, considering different categories of enterprises and workers. It also offers a framework to guide the transition and a roadmap for the next steps, including recommended criteria for choosing a subset of enterprises to participate in a future intervention for responsible digital wage payments.
3. A revised report addressing the feedback of the technical review team.
4. A presentation at a validation event to ensure the buy-in of key stakeholders and the integration of their insights, concerns, and recommendations.
5.  A final report in English as well as an executive summary detailing context, methodology, results and insights, and policy recommendations. Annexes include all data collection tools used (in English and local language), a list of persons interviewed or surveyed, primary data collected in forms such as transcripts, data files, or recordings, and ethical guidelines followed.

The Assessment will be aligned with the ILO house style manual, United Nations guidelines for gender-inclusive language, ILO gender mainstreaming strategies (GEMS) tools, and other relevant codes and guidelines for ethical research.

Timeframe and management arrangements

The contract is expected to start on July 1, 2025. The timeline for the deliverables will be as follows:

Deliverables/outputs

Deliverable 1: Research plan.

Target due dates: July 15, 2025 (feedback from technical review team provided by July 30, 2025)

Deliverable 2: Draft assessment report.

Target due dates: September 1, 2025 (feedback from technical review team provided by September 20, 2025)

Deliverable 3: Revised report addressing the feedback of the technical review team.

Target due dates: October 10, 2025

Deliverable 4: Final report with executive summary and annexes including all data collection tools used (in English and local language), list of persons interviewed or surveyed, primary data collected such as transcripts, data files, or recordings, and ethical guidelines followed.

Target due dates: October 30, 2025

The Project Officer responsible for Digital Wage Initiative in Cambodia is the focal point for the study and is responsible for day-to-day questions and management of the study. Regular meetings will take place with the assessment team to monitor the progress of the assignment, discuss any issues, questions, and risks, and provide guidance as needed.

Application

Interested applicants should submit their technical and financial proposals in English. The proposals should be clearly outlined:

• Cover letter, explaining why the applicant is suitable for the assignment.
• Organizational capability statement and profile of key staff and personnel clearly showing how the qualifications required are met.
• Understanding of the task and approach/methodology suggested for carrying out the assignment.
• Description of the timeline for actions to be undertaken to fulfil the assignment.
• Financial proposal outlining an estimated budget for the overall assignment, including professional fees and cost estimates with breakdown by necessary budget lines.

The technical and financial proposal should not exceed ten pages, excluding annexes. Proof of similar assignments, including papers produced if possible, and CV(s) of key staff and personnel to be involved are required as annexes.

Submission of proposals to: procurement.bfc@ilo.org, by June 16, 2025. Please mention “Rapid Assessment on Digital Wage Payments for Decent Work in Cambodia’s Tourism and Agro-Processing Sectors” in the subject of the email. For enquiries related to the assignment, interested candidates should contact Mr Virak Nuon (nuon@ilo.org)

Confidentiality Statement

All data and information received for this assignment are to be treated confidentially and are only to be used in connection with the execution of these Terms of Reference. All intellectual property rights arising from the execution of these Terms of Reference are assigned to IFC and ILO. The contents of written materials obtained and used in this assignment may not be disclosed to any third parties without the express advance written authorization of the IFC and ILO.