What Is a Bank Identification Number (BIN)?
The term bank identification number (BIN) refers to the initial set of four to six numbers that appear on a payment card. This set of numbers identifies the institution that issues the card and is key in the process of matching transactions to the issuer of the charge card. The numbering system applies to credit cards, charge cards, prepaid cards, gift cards, debit cards, prepaid cards, and electronic benefit cards.
How Bank Identification Numbers (BIN) Work
The bank identification number is a numbering system developed by the American National Standards Institute (ANSI) and the International Organization for Standardization (ISO) to identify institutions that issue different cards. The ANSI is a nonprofit organization (NPO) that creates business standards in the United States while the ISO is an international nongovernmental group that creates a variety of standards for different industries including the financial, health care, clothing, and aircraft fields.
All payment cards come with a BIN number. This is a set of four to six different numbers randomly assigned to debit cards, credit cards, charge cards, gift cards, and other payment cards. The number is embossed on the front of the card and appears in print just below as well. The first digit of the BIN specifies the major industry identifier—categories include airlines, banking and financial, or travel and entertainment. The digits that follow specify the issuing institution or bank. For example, the MII for a Visa credit card starts a four, which falls under the banking and financial category.
When a customer makes an online purchase, the customer enters their 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 including:
- the card brand, such as a Visa, MasterCard, American Express, and Diner's Club
- the card level, such as corporate or platinum
- the card type—a debit card, credit card, or other payment cards
- the issuing bank country
The BIN number allows merchants to accept multiple forms of payment and allows faster processing of transactions.
BINs—which may also be referred to as issuer identification numbers (IINs)—have a variety of useful applications. First, merchants are able to use BINs to evaluate and assess payment card transactions. BINs also allow a merchant to identify originating banks along with their address and phone number, and whether issuing banks are in the same country as the device used to make the transaction. The BIN also verifies the address information provided by the customer. But more importantly, the numbering system helps identify identity theft or potential security breaches by comparing data, such as the address of both the issuing institution and of the cardholder.
- A bank identification number is the initial set of four to six numbers that appear on credit cards, charge cards, prepaid cards, debit cards, and gift cards.
- The BIN helps merchants evaluate and assess their payment card transactions.
- The number allows merchants to accept multiple forms of payment and allows transactions to be processed faster.
Example of Bank Identification Number (BIN)
The BIN identifies the issuer of the card. This issuer receives the authorization request for the transaction to verify if the card and associated account are valid and whether the purchase amount is available. This process results in the charge being either approved or denied. Without a BIN, 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.
Here's a hypothetical example to show how it works. Let's say customer uses their bank card at the gas pump when they fill up their car's tank. Once they swipe the card, the system scans the BIN to detect the specific institution that issued the card. An authorization request is put on the customer's account. The request is authorized within a few seconds, and the transaction is approved if the funds are available or declined if the customer doesn't have enough funds to cover the charge.