A Bank Identification Number (BIN) is the first four to six numbers that appears on the front of a credit card. The BIN number is a unique identification of the banking institution that issued the card. BIN numbers are also assigned to charge cards, gift cards, debit cards, pre-paid cards and benefit cards to identify source of issue.
A BIN number can also be referred to as an “Issuer Identification Number” (IIN). The numbering sequence can sometimes expose identity theft or security breaches by comparing data such as the address of the institution issuing the card and the address of the card holder.
The process and purpose of BIN numbers
Bank Identification Numbers were developed by the American National Standards Institute (ANSI) and the International Organization for Standardization (ISO) to identify institutions that issue bank cards. The numbers have been developed in a specific sequence for identification. The first digit of the BIN number specifies the Major Industry Identifier (MII), and the next five digits specify the issuing institution or bank. For example the MII for a Visa credit card is a “4”. The BIN allows merchants to evaluate and assess their payment card transactions.
The BIN tells the merchant which bank the funds are being transferred from, the bank’s address and contact details. If the issuing bank is in the same country as the device used to make the payment it will verify the address information provided by the customer. The BIN number allows merchants to accept multiple forms of payments and allows for expedient processing.
If a customer makes an online credit card payment the merchant can tell from the first six digits entered which institution issued the card, the card brand (American Express, MasterCard, Visa, etc.), the card level (silver, gold, platinum) and the card type (credit or debit) as well as the issuing bank and country.
BIN authorization identification
The BIN number identifies which issuer will receive the payment authorization request for payment to verify whether the card account is valid and whether there are enough funds available to cover the payment amount requested. At this point the transaction is either approved or denied.
Once a card is swiped or the card details are entered online, the card processing software scans the BIN number to detect the specific issuing institution that will facilitate the withdrawal of funds. An authorization request is put presented on the cardholder account. The request yields an action within seconds – this will either be approved or declined.
Without the card issuing bank identifier, the card processing system would be unable to determine the origin of the cardholder’s funds and would be unable to complete the transaction to complete the transaction.
For more information about the definition of a bank identification number (BIN) is, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com