In this fully digitized age we live in, almost everything can be identified with a number, including financial institutions. The Bank Identification Number (BIN) is an important piece of information that can be used to connect payment card account numbers with specific issuing banks. Merchants can use BIN codes to make better transaction processing decisions, which can speed up checkouts, prevent fraud, and create better customer experiences. BINs can even help you with chargeback management. What is a BIN, and how can merchants use these numbers to their advantage?
One of the things that makes credit and debit cards such versatile payment instruments is that at their core, all they really consist of is a string of numbers that identifies a customer account. While additional data such as the name, address, expiration date, and CVV are needed for safely authenticating transactions, the key data element is the account number.
Most merchants will have noticed that Visa cards begin with 4, Mastercard with 5, and so on, but that’s not all the information the card account number encodes. With a BIN lookup tool like the one we’ve provided above, you can use a card number to identify the bank that issued it, and that can be a very useful thing to know.
A Bank Identification Number (BIN) is a four to six digit code contained within every credit and debit card number. It identifies the financial institution that issued the card. They may sometimes be referred to as Issuer Identification Numbers (IIN).
BINs are placed at the beginning of the card number, after the first digit, which is called the Major Industry Identifier (MII) and tells you which card network the card is associated with. The BIN code that follows identifies the issuing bank, and can also tell you what type of card it is and which country the issuer is located in.
The BIN numbering system was created by the American National Standards Institute and the International Organization for Standardization.
The primary purpose of the BIN is to route transaction authorization requests to the right issuing bank.
Merchants don’t need to look up BINs when they’re processing transactions—the payment processor handles that, and authorizations are usually completed in a matter of seconds. However, when customers provide payment card information to a merchant through their website or payment terminal, the merchant then has access to BIN data such as the location and card type. This can warn you when you might be processing a transaction for a customer in a country you’re not allowed to ship to due to export laws, or when a customer is setting up recurring payments on a limited-use prepaid card.
A BIN can also be used to make decisions related to fraud prevention, chargeback management, or the customer experience.
To stop sophisticated credit card fraud attempts, merchants need to evaluate multiple data points (usually with the help of AI-based fraud filters) to estimate the potential risk of a given transaction. Cross-referencing the BIN against other known data points can provide helpful insights.
The most obvious example would be the location information furnished by the BIN. If the customer is located far away from the issuing bank, or in a completely different country, this can be a strong indicator of identity theft. While there are always exceptions to the rule and there may be a perfectly legitimate explanation, red flags like this, when evaluated in combination with other indicators, can often identify fraud with a high degree of accuracy.
When you’re holding a potentially fraudulent order for manual review, the BIN can also help you contact the cardholder’s financial institution directly, and they may be able to provide additional information about whether or not the transaction is likely to be fraudulent.
The best way to implement a strong chargeback defense strategy is to analyze your chargeback data and determine exactly why they’re happening and where they’re coming from. BIN data can tell you if a large number of your chargebacks are associated with a specific bank.
For example, your chargeback analytics might inform you that a high percentage of your friendly fraud chargebacks come from cardholders who use a particular issuing bank. This could mean that this bank does not screen their cardholder disputes very carefully. You might then be able to reach out to the bank to discuss the problem, or at least try to find out what will help you represent those chargebacks more effectively.
Big data has taken over the world, and it’s not always easy to sift the useful information from the ephemera. When it comes to payment card numbers, it’s worth remembering that those first few digits always have a story to tell. Knowing which card network and issuing bank you’re dealing with can be very helpful when you’re trying to get the upper hand against fraud and chargebacks. With the BIN lookup tool we’ve provided above, merchants can immediately access the issuer details for any payment card number.