What is a 'Bank Identification Number - BIN'

A bank identification number (BIN) is the initial four to six numbers that appear on a credit card. The bank identification number uniquely identifies the institution issuing the card. The BIN is key in the process of matching transactions to the issuer of the charge card. This numbering system also applies to charge cards, gift cards, debit cards, prepaid cards and electronic benefit cards.

BREAKING DOWN 'Bank Identification Number - BIN'

Bank identification numbers are used by other institutions, such as American Express, as well. The term "issuer identification number" (IIN) is used interchangeably with BIN. The numbering system helps identify identity theft or potential security breaches by comparing data, such as the address of the institution issuing the card and the address of the cardholder.

How It Works

The bank identification number is a numbering system developed by the American National Standards Institute and the International Organization for Standardization (ISO) to identify institutions that issue bank cards. The first digit of the BIN specifies the Major Industry Identifier (MII), such as airline, banking or travel, and the next five digits specify the issuing institution or bank. For example, the MII for a Visa credit card starts with a 4. The BIN helps merchants evaluate and assess their payment card transactions.

The BIN quickly helps a merchant identify which bank the money is being transferred from, the address and phone number of the bank, if the issuing bank is in the same country as the device used to make the transaction, and verifies the address information provided by the customer. The number allows merchants to accept multiple forms of payment and allows faster processing of transactions.

When a customer makes an online purchase, the customer enters her card details on the payment page. After submitting the first four to six digits of the card, the online retailer can detect which institution issued the customer’s card, the card brand (such as Visa or MasterCard), the card level (such as corporate or platinum), the card type (such as a debit card or a credit card), and the issuing bank country.

Authorization

The BIN identifies which issuer receives the authorization request for the transaction to verify if the card or account is valid and whether the purchase amount is available on the card. This process results in the charge being either approved or denied.

For example, a customer stands at a gas pump and swipes her bank card. Once she swipes the card, the system scans the BIN to detect the specific issuing institution that withdraws the funds. An authorization request is put on the customer's account. The request is authorized within a few seconds, and the transaction is approved. The credit card processing system would be unable to determine the origin of the customer's funds and would be unable to complete the transaction without a BIN.

RELATED TERMS
  1. Issuer Identification Number (IIN)

    The issuer identification number (IIN) is the first few digits ...
  2. Cash Card

    A cash card is any electronic payment card that stores cash for ...
  3. Card Recovery Bulletin

    A card recovery bulletin is published by credit card issuers ...
  4. Credit Card Funding

    Credit card funding is the use of a credit card account to provide ...
  5. Card Reader

    A credit card reader reads the the information on a credit or ...
  6. Business Credit Card

    A business credit card is a credit card intended for use by a ...
Related Articles
  1. Personal Finance

    3 New Types Of Credit Cards To Look For

    These three types of credit cards are becoming popular with customers looking to pay less fees and build up their credit scores.
  2. Personal Finance

    10 Considerations For Using Your Credit Card Abroad

    Credit cards can be the best item you pack when traveling, just make sure that you are taking the right card that suits your needs.
  3. Personal Finance

    Purchases You Should Always Make With A Credit Card

    Credit cards aren't always bad possessions to have. There are certain perks associated with using credit cards as we make routine or irregular purchases.
  4. Personal Finance

    Ways to Avoid Getting Burned by Prepaid Debit Cards

    Prepaid debit cards have many differences from traditional debit and credit cards that can cost you money if you don’t know what to watch out for.
  5. Personal Finance

    Credit Card or Cash: Which To Use?

    Credit cards are more convenient to use than cash, but they're not always the best choice. Here is why you should and shouldn't pay with a credit card.
  6. Small Business

    How to Use Small Business Credit Cards

    A small business credit card can be a convenient way to increase your company's purchasing power, enabling access to a revolving line of credit.
  7. Personal Finance

    Comparing Credit Card Companies

    The four main credit card networks all have distinct strengths and drawbacks. Be sure you understand their unique traits before making a selection.
  8. Personal Finance

    American Express's Main Competition

    American Express competes with Visa, MasterCard, and Discover Financial Services in the credit card space. It also competes with banks to draw consumers.
  9. Personal Finance

    5 Signs You Need a New Credit Card

    High interest rates, hefty annual fees and poor customer service are among the indications that you have a bad credit card.
RELATED FAQS
  1. Debit card versus credit card

    Can't figure out which card to use when making a purchase decision? Here is everything you need to know about the differences ... Read Answer >>
  2. What are some examples of common credit card reward program benefits?

    Learn about different benefits available to credit card holders including cash back, air travel miles, introductory rates, ... Read Answer >>
  3. Can I use a prepaid credit card to pay bills or transfer money to other accounts?

    Learn how prepaid credit cards enable convenient bill payments and transfers. Explore different fees charged for such transactions. Read Answer >>
  4. Can the Best Buy credit card be used anywhere?

    Learn how the Best Buy credit card can only be used in Best Buy stores and online to make purchases through the Best Buy ... Read Answer >>
Trading Center