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.
Understanding Bank Identification Numbers (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 a BIN 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 the number four. 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. The BIN verifies the address information provided by the customer.
The BIN 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.
Examples of BIN and 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.
- A bank identification number (BIN) is the initial 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.