A Bank Identification Number or BIN refers to a credit card’s initial four to six digits.
The first four to six digits on a credit card help identify the card issuer. Additionally, the first digit represents the primary industry identifier, while the remaining digits indicate the issuing financial institution. These card numbers allow you to trace transactions and cards back to their issuer.
You can find the Bank Identification Number (BIN) on several cards, including debit cards, charge cards, gift cards, and credit cards. More importantly, the bank identification number helps financial institutions prevent fraud and identity theft, and track stolen payment cards.
There are two steps in every online purchase that require payment: authorisation and clearance. The BIN is responsible for completing the first payment process step, which is an authorisation. The BIN identifies which issuer, usually a bank or credit card company, should receive the authorisation request to verify the validity of the account or card and the purchase amount.
During the authorisation process, numbers are quickly checked against a third-party service provider behind the scenes. Most e-commerce retailers have their payment processors handle BIN checks against BIN lists they maintain or subscribe to.
The BIN enables merchants to accept more than one payment simultaneously. Also, payment processing is accelerated with bank identification numbers. Banks and financial institutions also use BINs to identify compromised or stolen cards since they provide information about the type of card, the type of bank, and other details about the issuing company and the cardholder.
The numbers on your card aren’t random. As mentioned above, the bank identification numbers are the first four to six numbers on your credit card. BINs identify which card network and issuer are responsible for a specific card.
A Major Industry Identifier (MII) is the first digit on your card, which informs you of the general category your card falls into. For example, the numbers 4 and 5 are for banking and financial cards—mainly Visa and Mastercard, respectively—while the number 1 is for airline cards. Under the BIN, the issuing party is identified by the third or fifth digits following the MII.
Individual account identification numbers are the rest of the numbers that do not fall under the BIN. The last digit on your credit card is the Luhn check digit, which is generated using the Luhn algorithm to determine if a credit card number is valid.
Let’s look at a hypothetical example of how the BIN bank identification number works. Suppose a customer pays for fuel with a card at a petrol pump. After swiping the card, the system scans the BIN to identify the issuing institution.
An authorisation request is then placed on the customer’s account. It takes a few seconds for the request to be authorised. When the transaction is authenticated, it is approved if funds are available or declined otherwise.
The bin identification number scam is a fraud scheme. In this case, fraudsters call, pretending to be from your bank, saying that your account information has been compromised. To gain your trust, the scammer may provide you with information. They extract more information about your bank account once they have hooked you.
After they have that information, they give you the bank identification number, ask for your confirmation of the remaining digits on the card, and ask for any other information you can provide. Furthermore, a fraudster can generate possible strings of numbers from a valid BIN and test them using small online transactions to see if they find a number in use.
Merchants can use the BIN to verify transactions and identify red flags, such as bank locations and billing addresses in different countries. Furthermore, the merchant can verify the information by contacting the issuer identified by the BIN if the transaction appears suspicious.
Even though BINs contain relatively basic information, they can be used to identify potentially fraudulent transactions. Among other things, many fraud prevention tools will use BINs to detect potentially fraudulent transactions.
The bank identification numbers increase the speed and safety of card validation. Apart from adding another level of security and authentication, it also makes the checkout process smoother while preventing errors and increasing efficiency. Listed below are the primary benefits of a BIN:
A BIN is also a valuable data source for merchants which can analyse customer demographics, changing purchasing patterns, and chargebacks. By using BIN information, merchants can send targeted promotions and offers to customers based on the cards they use.
Merchants can also use BIN information to identify an issuer that makes a disproportionate number of chargebacks against their business or rejects their representation packages more often than others. Furthermore, merchants can use this information to identify mistakes they might be making or to tailor their representation to that particular issuer.
The bank identification number (BIN) identifies which financial institution issued the payment card. In addition, they safeguard consumers against identity theft and fraud by facilitating financial transactions. Your financial information, including your BIN, is susceptible, so you must keep it confidential at all costs.
Ans. Generally, consumers don’t use BINs, but it is essential to understand what they mean. The first digit identifies the primary industry, while the remaining digits identify the issuing financial institution. The bank identification number is used to determine the financial institution that has issued the card.
Ans. The bank identification number enables merchants to accept multiple payments simultaneously. The speed at which payments are processed has also been greatly improved. Banks and financial institutions can identify compromised or stolen cards by using BINs because they provide information about the card type, bank type, and other details about the issuing company and cardholder.
Ans. In many cases, the terms “Issuer Identification Number” (IIN) and “Business Identification Number” (BIN) can be used interchangeably. Through this numbering system, it is possible to detect identity theft or security breaches to the institution or cardholder by comparing data such as the institution’s address and the cardholder’s address.
Ans. The first four or six digits of a credit card are referred to as a bank identification number (BIN). These numbers identify the issuing financial institution. Moreover, the bank identification number is a security measure to protect merchants and consumers while engaging in online transactions.
Ans. The bank identification number is the first four to six numbers on a payment card. These digits on a card identify the bank or financial institution that has issued the card. Furthermore, BIN can be used to trace transactions back to the card issuer for making the payment.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
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