Author: Jacob Dunn

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Finance Financial Services Technology

Recurring payments vs. subscription

Recurring payments vs. subscription

Though both recurring payments and subscription systems share some similarities, they are still distinct from one another. Choosing the best one without knowing the concept behind them both is challenging.

With the rise of digitization and e-commerce, the demand for flexible payment options has also increased. Some businesses and customers want a subscription system, while others prefer recurring payment models.  Let’s check what is the best model for your business to receive online payments.

This post will guide you with this aspect. You will know the difference between recurring and subscription payment options. Read this and select the one that fits well for your business.

Reccuring payments vs. subscription

Table of contents:

  1. What is a recurring payment system? 
  2. Fixed payment and variable payment
  3. Benefits of recurring payment
  4. Implementation of recurring payment model
  5. What is subscription payment?
  6. Benefit of a subscription system
  7. Implementation of subscription payment model
  8. Final thoughts on recurring payments vs subscription
 

1. What is a recurring payment system? 

Recurring payments involve an auto-pay system that works with a one-time payment setting. Consumers have to provide you with the details of their payment method, usually debit or credit card. Then the whole thing is on your system. It has to save the details and automatically transfer funds from the consumer accounts to yours after a set interval.

The main benefit of this payment model is that you don’t need the customer’s permission every time, so there are no delays. Of course, the user will have the right to cancel, but before the start of a new payment cycle.

 

2. Fixed payment and variable payment

The payment mode further has two subcategories — fixed payment and variable payment.

Fixed recurring payment:  The fixed recurring system is similar to the method followed for magazine charges, gym subscriptions, and automatic bill paying systems.  You have a set amount for a particular service, and the customer will pay that for every cycle. It may be a monthly, yearly, weekly, or quarterly cycle.  

Variable recurring payment: The term itself suggests that this model will deal with payment cycles that include changes in the principal amount. This system works best for usage-based services such as internet charges, utility bills, and more.

 

3. Benefits of recurring payment

The benefit of this payment model is that it saves consumers and businesses a lot of time. However, this is not the only reason that makes it a preferred option.  The following reasons also contribute.

Benefits of recurring payment
 

4. Implementation of recurring payment model

The deployment of recurring payment in your business is not a very complicated task. You can employ the system by following the steps given below:

  • Select the platform that can help you to create a recurring payment option. 
  • Create guidelines for the customer.  You have to guide them through all the terms and the procedures of the payment.
  • Set the elements such as payment start date, billing frequency, end dates, amount, and more.
  • Take measure and develop a system to store sensitive payment information. There are Payment Card Industry Data Security Standards that you have to follow. 
 

5. What is subscription payment?

The subscription payment system is an advanced payment model developed to enhance customer retention rates. The model involves providing a small preview of your services and encourages consumers to buy your services.

The basic concept of the method is similar to the recurring payment. But in this case, the consumer achieves more flexibility.  They can choose from multiple programs and can switch between them.

Moreover, in most subscriptions, the periodic payment will be manual. It means the consumer will have a total control over the payment and will not have to share confidential details with the business they are dealing with.

 

6. Benefit of a subscription system

The subscription is a preferred payment model for software as a service products.  The following things make the subscription accessible.

Benefit of a subscription system
 

7. Implementation of subscription payment model

The deployment of the subscription payment model is a multi-layer process that works on both backend and frontend. You have to create a network that can receive, save, and sort the consumer details and payment status in real-time. Following are the things that you have to undergo for adding a subscription:

  • Ask the consumer for signup and receive their information.
  • Collect and safely store their payment details for future references.
  • Add the consumer to the subscriber list along with the dates, time, and other similar information.
  • Once the customer has connected, create the subscription status chart.
 

8. Final thoughts on recurring payments vs. subscription

The recurring and subscription are very similar to each other in almost every aspect. They are modern, widely accepted, and help to retain consumers. They even share common benefits like payment security, more extensive exposure, and more.

The only difference that you will find in them is the timing and payment options. The recurring payment entirely depends on credit or debit card, while subscription may be developed for other payments. Moreover, in the recurring model, you have to store payment details, but the subscription system if flexible with it.

So, the final answer to the question, “Which one is the best?” It depends on the type of services you offer, the flexibility you need, and the audience you are targeting. Analyze these aspects, combine them with the above data, and you will have your answer.

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Categories
Healthcare Technology

Ways smart tech can help the UAE medical tourism sector

Ways smart tech can help the UAE medical tourism sector

Think medical tourism hotspots and Central America and Southeast Asia come to mind. Costa Rica, Thailand, Malaysia, and Singapore regularly rank among the top destinations for people seeking healthcare abroad. These countries have successfully marketed themselves as medical tourism destinations for decades and have built up a global reputation. This success has attracted competitors. Middle Eastern countries such as Jordan, Egypt, and the United Arab Emirates are tapping into the $60 billion-a-year medical tourism industry.

With ambitious plans to overhaul its healthcare system, the UAE began aggressively positioning as a healthcare destination a decade ago. Ten years on, brand new medical facilities and global specialists attract an increasing stream of medical tourists. AI, blockchain, and IoMT play a large role in this plan, but just how this new tech will expand medical tourism in the UAE is often vague. In this post, I’d like to suggest ways these technologies might take the UAE’s medical tourism sector to new heights.

UAE medical tourism

Motivation to travel for healthcare services varies. Rising costs and increasingly strained domestic health systems spur many to cross borders for better, more cost-effective care. Countries that attract global specialists and equip them with the latest technology can gain a competitive advantage and benefit from the growing trend. The Emirati strategy for the past ten years has been to attract high net worth individuals from neighboring Gulf states as well as countries further afield — especially China and Russia. Khaleej Times reports that 37 percent of medical tourists came from Asia, 31 percent came from other GCC countries, and 15 percent came from Europe. Medical tourists from these regions come to the UAE seeking better specialist care than what’s available in their home countries. Geography also plays a role. Convenient air links are yet another favorable aspect and part of the desert nation’s holistic plan. Dubai’s two airports and Abu Dhabi’s international hub puts the UAE within an eight-hour flight of their target markets.

Investment in new medical facilities is helping to grow the UAE’s standing. Dubai’s Healthcare City is one example of a larger initiative to achieve these ambitious goals. The world’s largest healthcare “free zone” is a magnet for both specialists and patients from across the world. As an internationally-recognized center for healthcare, Dubai Healthcare City is a robust public/private partnership unique in the region. Part of what fuels this medical tourism push is innovative technological solutions that help healthcare companies stand out in an increasingly crowded competitive landscape. A pivot to rely more on private healthcare providers has allowed the market to flourish. An influx of western technology and specialists continues to set the Emirates apart and convince global medical tourists that the UAE is a good destination.

Specialist care

Dubai’s Healthcare Authority, or DHA, reports that more than 300,000 medical tourists traveled to the Emirate in 2016, up nearly 10 percent from the previous year. The industry generated $381 million. The most sought-after procedures are in orthopedics, ophthalmology, fertility treatment, and cosmetic surgery. Each field requires highly skilled professionals and the latest medical equipment. More than simply importing the latest tech, however, the UAE is making it easier for medical professionals to relocate and work in the Emirates. 10-year visas for medical professionals have attracted many from across the world.

Meanwhile, many technological innovations the UAE has employed are software-based. Artificial intelligence and blockchain technology both factor into the government’s goal to help doctors deliver more responsive care. These tools improve the quality of care and allow the UAE to leapfrog legacy systems. A strong commitment to embrace new technologies and bring specialists in who know how to use them, increase Emirati healthcare companies’ global reputation.

Artificial intelligence

Part of the UAE’s larger goals to attract medical tourists is to put the latest technology to good use. This image as a high-tech destination sets the Emirates apart among other medical tourism destinations. One stated goal of the UAE’s healthcare focus is in artificial intelligence. The growing field promises to augment doctor decision making, possibly diagnose disease, and efficiently handle large sets of medical data. Public sector investment and private sector innovation have come together in the UAE to produce high-tech healthcare system. But more than just hype, real strides in the quality of care have launched the Emirates higher in global medical tourism rankings.

Eagerness to adopt emerging technologies sets the UAE ahead of other medical tourism destinations and allows Emirati healthcare to deliver real value to patients. One way AI can aid in the medical tourism sector is to handle lots of unstructured patient data to help doctors make better decisions. Since medical tourists will come from several different countries, bringing medical records with them poses a challenge for existing systems. Leveraging artificial intelligence is already a goal of the Emirati medical tourism sector. This is one of the many ways to put the technology to good use and attract more medical tourists to the UAE.

Blockchain technology

Just as AI plays a role in the UAE’s holistic medical tourism plan, blockchain technology does as well. Both technologies can help the UAE medical tourism market expand and bring in more patients. While AI can handle large sets of unstructured medical data, helping to diagnose medical conditions, blockchain technology can help secure this data, making records easier to transfer between hospitals and clinics within the UAE and with facilities abroad. For patients seeking a procedure in the Emirates, a blockchain-based application could facilitate the transfer of electronic health records. Handling EHR is a common challenge across the healthcare sector, however, medical tourists add additional friction to this equation. Siloed records from hundreds of different health systems cost a lot in time and resources to sift through. A blockchain-based application that puts patients in control of their records could allow them to automatically give or revoke access to Emirati doctors.

Additionally, using blockchain technology in pharmaceutical supply chains would enhance the patient experience, drive costs down, and ensure that the medical tourism sector is well-stocked to handle the influx of new arrivals. User-friendly applications that record the transport and receipt of genuine drugs can help build trust in the Emirati healthcare system and further expand the medical tourism industry.

Internet of medical things

Internet of medical things or IoMT is yet another area for technological innovation in the Emirati healthcare sector. The term comprises a range of connected medical devices that improve patient outcomes and aid patient monitoring. The UAE is already a lucrative market for wearables and is only set to grow. Health devices that track vital signs, blood sugar, or activity are popular consumer goods. Ones that incorporate blockchain or AI can be even more powerful and secure. Enhanced patient monitoring, as well as telemedicine possibilities, make IoMT a promising technology for the medical tourism sector.

Since orthopedics is one of the main focuses of the Emirati medical tourism industry, let’s imagine an IoMT device for monitoring a patient after surgery. Making sure a patient is getting enough exercise post-operation is one way IoMT could come in handy. Connecting patients, doctors, and physical therapists could be greatly streamlined with the use of IoMT devices. These technological solutions can pave the way to delivering better, more data-driven care for less.

Conclusion

Medical tourism in the UAE is a booming business. It’s set to get even larger as the number of medical tourists increases. The government’s ambitious goals to improve care and reduce costs is part of a larger plan to keep the Emirates competitive in the face of growing competition. Technological solutions such as AI, blockchain, and the internet of medical things factor into this larger calculation. Ensuring that there are enough medical professionals who know how to use them, however, is also an essential part. The UAE is positioning itself as a state-of-the-art medical tourism destination. Over the last decade, the industry has grown considerably. With the right moves and equipment, this trend will only continue.

Categories
Finance Financial Services

Recurring payments and how to use them

Recurring payments and how to use them

Recurring payments have worked their way into thousands of popular subscription services. While subscription models are nothing new, e-commerce has driven innovation in new directions. Integrating online payments in customer-friendly ways is now a top priority for many firms looking to improve cash flow. Video and music streaming giants popularized the trend and now other companies taking these lessons to sell goods or services. Just how seamless a payment provider integration is often means the difference between happy customers and cancelations. Here’s a brief overview of recurring payments and ways put it to good use.

Recurring payments and how to use them

Table of contents:

 

What are Recurring payments?

Recurring payment subscription is a business model in which cardholders pay automatically at regular intervals for a product or service. According to Mercator Advisory Group, e-commerce, bill paying, as well as subscription models are factors underlying rapid payments development. In this model, customers allow retailers to save their payment details and give their permission to automatically withdraw funds from a bank account or credit card. This can improve the checkout experience, which can vastly improve customer retention and win loyal customers.

A 2018 report from the consulting firm McKinsey found that the subscription market grew 100% per year for the previous five years. Nearly half of all subscriptions are video or music streaming services. Among the most famous examples of companies that use recurring payments model to improve cash flow is Amazon, whose revenue rose from $7 billion to $10 billion in recurring billing after launching its service Amazon Prime. Other examples of such global players are streaming services Netflix and Spotify. In the second quarter of 2019, Netflix reached a record-breaking 150 million paid subscribers. Spotify meanwhile, has 108 million.

a graph about the percent of subscribers among online shoppers
 

Subscription models

Currently, you can split recurring payment models into three types. Curated choice takes user interests to pitch personalized content while replenishment fills routine items at specific intervals. VIP club recurring billing models create an air of exclusivity that can make your business stand out.

  • Curation — This is the most popular according to the McKinsey survey. What attracts customers in this category are the positive emotions linked to receiving personalized, hard-to-find items. Try the World does this particularly well. Subscribers save their credit card details once and receive snacks from around the world every month.
  • Replenishment — This model saves users’ payment information and helps optimize shopping for routine items such as razors or toothbrushes. Dollar Shave Club or The Bam and Boo allow you to customize your recurring billing frequency based on how often they ship.
  • VIP club — Members can access premium products, discounts, or free delivery otherwise not available to regular customers. Amazon’s Subscribe & Save offers attractive discounts to members and is among the most popular recurring billing model.
 

Managing recurring subscription billing and existing systems

In many services, customers can adjust their recurring payments schedule according to their needs. When a customer pays a set amount of money for the product or service, this is a fixed subscription. This payment schedule is widely used by different kinds of streaming services when a fixed membership fee is charged from the customer’s bank account regularly. There is also a variable amount model in which the price that the customer pays is not stable. You can see this schedule applied when your account is charged for utility bills which differ from month to month.

 

Benefits and challenges

Among the most obvious challenges to recurring billing is the convenience and comfort for both customers and merchants. Customers using this method often stay longer than traditional one-off transactions. This gives the company a much better idea of revenue and makes supply ordering much easier. In this way, the company can gain more recurring customers. recurring billing can also lower the costs, helping to receive payments without delays and reminders.

For consumers, this payment method allows them to save time on entering credit card data each time at checkout. Subscription models can also reduce the anxiety and indecision that some consumers feel as they try to make a perfect purchase. Moreover, subscription packages can cause more positive emotions in comparison to traditional shopping because of the less effort and time spent on choosing the right product and element of surprise.

Besides some obvious advantages, some caution should be exercised with a recurring payments plan. First of all, it is more difficult and time-consuming to troubleshoot some potential issues or errors. For companies, there are still some administrative costs left. Moreover, according to the McKinsey report, churn rates of such businesses as subscription boxes are quite high and companies should have a unique competitive advantage to attract buyers.

graphic with 5 advantages of reccuring payments for business
 

Recurring payments perspectives

Recurring payment methods besides some resistance is becoming widely accepted and used. According to the Gocardless survey, which surveyed 4,000 people, 52% of respondents preferred direct debit. In the UK and Germany, the number of respondents enthusiastic about direct debit was even higher reaching more than 60%.

Another recent survey conducted on almost 12,800 participants from different countries showed that Canada is the leading nation willing to make automatic payments with credit cards. 27% of the respondents declared that they are likely to use it to pay for offline subscriptions whereas 26% for bills and subscriptions online. The survey found similar results for American consumers. In the US alone the recurring billing method is expected to increase to $473 billion by 2021.

 

Blockchain recurring payments

First services offering recurring payments using cryptocurrency were Coinbase and PumaPay. In August 2019 Monarch announced its decentralized blockchain-based recurring payment system. The advantage of this subscription business model includes capturing a growing market of people who want to see alternatives to centralized systems. Recurring billing smart contracts is what allows users to hold their own private keys and seed phrase.

Decentralized web browser Brave flips recurring billing on its head by paying users in their native BAT, or basic attention token cryptocurrency to look at advertisements on the platform. While it remains an open question about the viability of this business, cryptocurrency transactions do lend themselves well to small, payments. Brave does offer an example of how similar systems could work. It’s conceivable that a streaming service or online publication could charge a small fee per minute or per view directly from users instead of running ads.

Smart contracts can verifiably prove that a user viewed something and release payment automatically, greatly streamlining billing and auditing. Of course, instead of credit cards and bank accounts, users would connect their crypto wallets. So if you want to accept crypto you would need to be able to integrate with a range of user wallets.

 

Final thoughts on recurring payments

The question arises whether this system will be the future of recurring billing. What we know for sure is that it opens wide perspectives for businesses with its improved security and possibilities to create personalized subscription plans. In addition, recurring payments can streamline a checkout process by saving key payment details. Credit card, debit card and maybe crypto wallet integrations will be ever more vital as more consumers and retailers transition to e-commerce.

Adding a recurring payment system can grow your business and win loyal customers. Want to add it to your business? Schedule a free 15-minute consultation with one of our payment experts to find out more.

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