Decoding Bank Identification Numbers (BINs) and what they mean for merchants

Bank Identification Numbers (BINs for short) contain a goldmine of information critical to the functioning of the online payment process. In this blog, we'll crack the code on bank identification numbers, revealing the world hidden within these seemingly ordinary digits, exploring: 

• What is a Bank Identification Number
• The meaning behind the numbers in a BIN
• How BINs are used in transaction processing
• How can merchants use BINs to optimize payment processing
• How to access BIN data
• Why BINs will be getting longer in the future and the merchant impact 

What is a Bank Identification Number?

A Bank Identification Number (BIN) is a sequence of numbers on a payment card that is part of the Primary Account Number (PAN). These digits are not random; they provide specific information about the card. The BIN identifies the issuing bank or financial institution, the type of card, and the card scheme (such as Visa or MasterCard).

Traditionally, a BIN consists of the first six digits of a payment card. However, a regulatory change in 2022 extended the BIN to eight digits globally due to the increasing number of cards. In some cases, a BIN can be even longer than eight digits.

While "BIN" is the common term, it is also known as the Issuer Identification Number (IIN). This is because today, not only banks issue cards.

Where did BINs originate?

The American Bankers Association (ABA) and the International Organization for Standardization (ISO) developed the BIN concept in the 1960s. Today, BINs have become a global standard for identifying card issuers and facilitating secure and efficient payment transactions. 

How many digits are BINs?

The number of digits that make up a BIN varies and has evolved over time. 

Today, most cards carry eight-digit BINs—the first eight digits. This was after a regulatory change introduced in April 2022 to accommodate the growing number of financial institutions issuing cards and ensure a wider range of unique identifiers. 

But, while eight digits are the standard, there are cases where BINs are as long as 11-12 digits. 

What does a BIN tell you about the card?

The string of digits that make up a BIN contains a ton of valuable information for everyone involved in the card processing lifecycle. This includes:

1. The institution that issued the card
2. The card type
3. The card network
4. The country of issuance
5. The card level: standard, gold, business etc,

Major Industry Identifier (MII) codes by category:

The first digit of a payment card number is the Major Industry Identifier (MII). Importantly, it reveals the card issuer category, an inherent aspect of the card brand.

Common MII codes

3: Travel and entertainment

This code identifies cards issued by companies that originally specialized in travel and entertainment expenses, such as American Express and Diner's Club.

4: Financial and banking

This code signifies cards issued by traditional banks and financial institutions, including Visa and Visa Electron.

5: Financial and banking

This category encompasses cards issued by major payment networks, including:

• MasterCard
• Maestro 
• Discover 
• JCB 

The MII codes themselves are predefined within the ISO/IEC 7812 standard, which, consequently, all card issuers and payment networks must adhere to. Codes are assigned based on the primary function of the card issuer category, as listed above.

How are BINs used for transaction processing?

Beyond identifying a card's unique characteristics, BINs play a critical role in the payment lifecycle. Here's how BINs function at each stage of the payment process:

Issuer Identification: The primary function of a BIN is to identify the issuing bank associated with the card. This enables the merchant to initiate the appropriate processing flow.

Card type identification: Merchants can use the BIN to identify what type of card their customer is using. This is important in spaces like gambling, where credit card payments are prohibited in some jurisdictions.   

Routing: Once the issuing bank is identified, the BIN directs the transaction to the correct network for authorization. This ensures the transaction reaches the right place for approval or decline.

Authorization: During the payment authorization stage, the BIN is used for risk assessments, notably for fraud prevention (more on this next).

Fraud prevention: BIN data, combined with other factors like cardholder location and spending patterns, helps merchants identify potentially fraudulent transactions. By analyzing historical fraud attempts linked to specific BINs, merchants can implement stricter verification procedures for suspicious transactions.

Verification: BINs can inform parties in the payment ecosystem of the type of verification required. For example, a high-risk BIN might trigger a request for a CVV (card verification value) code or a 3D Secure authentication step.

Reporting: BINs are valuable for generating reports on transaction activity. By analyzing BIN data, merchants can gain insights into customer demographics, spending habits, and preferred payment methods based on issuing bank and region.

Overall efficiency: By streamlining identification, routing, and risk assessment, BINs contribute to a faster and more efficient payment processing experience for merchants and customers.

How can merchants use BINs to optimize payment processing?

Merchants can leverage BIN-level trends to optimize payment processing. 

Let's take a closer look. 

Reduce payment fees

BINs give merchants intel that allows them to route transactions through the most efficient processing networks, such as local card schemes, helping merchants reduce payment fees. 

Fight against fraud 

Fraudsters are constantly innovating, but merchants can build a powerful fraud filter by analyzing BIN history and flagging suspicious issuers or regions. This proactive approach can prevent fraudulent transactions before they happen, safeguarding the business and furthering customer trust.

Tailor payment strategies per market

Use BIN data to determine the cardholder's location and offer localized services, currency conversions, and language preferences, providing a more seamless and user-friendly customer experience.

Understand customers

By analyzing BIN-linked demographics and spending patterns, merchants can uncover valuable insights into customer behavior and preferences. This intel can inform targeted marketing campaigns, loyalty programs, and product recommendations, fostering stronger customer relationships and boosting sales. 

Boost performance

With BIN data merchants can track and analyze transaction performance by card issuer and type, enabling merchants to identify trends, optimize payment strategies, and improve overall processing efficiency. 

How can merchants access BIN data?

Merchants cannot access BIN data directly from the card schemes. Instead, they have to rely on third parties. Typically that'll be their payment service provider (PSP), but it could also be through another service. Either way, the advice when evaluating any BIN data provider is to ensure that it gets its data directly from the schemes. 

Even when a merchant does get access to the data, many merchants cannot carry out BIN-level analysis or utilize BIN data as part of their payment processing strategy, at least not meaningfully.

There are a few reasons for this:

1. Inconsistent Data: Different card networks (Visa, MasterCard) use varying terminologies and formats, complicating data standardization.
2. Complexity: BIN files contain millions of data points. Merging and interpreting BIN data from different sources requires significant expertise and resources.
3. Multiple PSPs: Merchants using multiple Payment Service Providers (PSPs) must duplicate and maintain BIN logic across all platforms, which is cumbersome and error-prone. 

At Primer, we abstract this complexity for our merchants. We have the most up-to-date BIN data directly from the card schemes. But we go further to support our merchants by standardizing all the data points and translating them into direct attributes like "credit" or "debit." This massively reduces the complexity for merchants building payment flows.

For example, if a merchant needs to block credit card payments, they will not need to know the BIN that maps to every possible credit card issued. Instead, they just need to create a condition block that instructs Primer to decline credit card payments. It’s that easy.

Additionally, Primer enables centralized logic for handling BIN data, making it easier to manage and use multiple PSPs. 

As a result, we're making it simple for merchants to:

1. Introduce cost-based routing: With Primer, merchants can easily identify co-badged cards and route payments through local schemes to reduce processing fees. For example, local networks like Cartes Bancaires in France or EFTPOS in Australia can be cheaper than global networks.
2. Meet regulatory obligations: BIN data helps ensure compliance with regulations by identifying and blocking prohibited transactions, such as gambling firms blocking credit card payments, in certain jurisdictions.
3. Strength fraud prevention: Identifying and blocking high-risk BINs or card ranges can mitigate fraud attacks, improving overall transaction security.
4. Conduct performance analysis: Analyzing BIN data allows merchants to identify high-performing and underperforming card types, issuers, or networks. Take a look at this example of how our customer success team delivered a 7% authorization rate uplift for a customer by analyzing 3DS performance at the BIN level.

Final thoughts 

BIN data is a powerful tool for optimizing payment processing, ensuring regulatory compliance, and preventing fraud. However, its complexity requires robust solutions like Primer to unlock its full potential. By leveraging BIN data effectively, merchants can enhance their payment strategies, reduce costs, and improve transaction security.

Get in touch to learn more.