Since the 1970s, the American Bankers Association has served as the registered authority for bank identification numbers (BINs). Originally, the American National Standards Institute (ANSI) and the International Organization for Standardization (ISO) first invented this system to help with speeding up transactions, simplifying the authentication process, and preventing identity theft.
Today, your bank identification number is essentially designed in the same format as the original BINs. As a merchant, understanding BIN numbers can help you analyze risk and quickly obtain important information during data breaches.
So, what is a BIN number? And how can you use BINs to improve your transaction processes? Find out more by reading on.
TL;DR
- The BIN number gives merchants important information about the card type and issuer.
- It can be found on the front of the credit, debit, or prepaid card.
- The BIN contains the major industry identifier and the issuer identification number, which show the card’s brand and issuer.
- BIN numbers are used to route transactions, authenticate accounts, and prevent fraudulent transactions.
What Is a Bank Identification Number?
So, what is the BIN number?
The bank identification number is the first six to eight digits of the primary account number (PAN). This tells merchants where the card was issued. Additionally, it can reveal a few other important details.
- The card brand
- The issuer country
- The card’s level, such as platinum or diamond
- The country where the transaction is occurring
Because you can easily see the BIN number, you can see who issued the card and determine if the card is fraudulent. This helps merchants spot stolen cards and avoid processing suspicious transactions.
While technically some of this information isn’t directly shown in the BIN, it can be found using a database map. For example, merchants can look up certain sequences of numbers in the database to see where the issuer is based. Then, this information can be used to determine the transaction’s risk profile.
Where To Find a BIN Number
You can find the PAN on the front of the credit, debit, or prepaid card. The BIN is the first six to eight digits of this number.
How the BIN Number Works
While it might look like just a number, the BIN contains essential information. After learning where to find the BIN number, the next step is breaking down each component within it. The major components are the major industry identifier (MII) and the issuer identification number (IIN).
The Major Industry Identifier
The first digit you see is the major industry identifier. This demonstrates which institution issued the card. For example, the following are a few examples of MII and institutions.
- 1: Airline industry
- 2: Airline industry
- 3: Traveling and entertainment
- 4: Banking and financial sectors
- 5: Banking and financial sectors
- 6: Banking and financial sectors
- 7: Oil industry
- 8: Healthcare and telecommunications
Because of how each credit card came into being, the MII can vary between credit card issuers. For example, American Express and traveling cards start with a 3. While Discover cards start with a 6, Visa begins with a 4. Mastercards can be a 2 or a 5.
The Issuer Identification Number
After the MII, the next five to seven digits are the issuer identification number (IIN). The IIN shows which financial institution is responsible for issuing the card. After the IIN, the rest of the numbers on the PAN make up the individual account number.
It’s important to note that BIN numbers recently underwent a major change. Originally, BINs only had six numbers. Around 2017, major credit cards began to realize that they would eventually run out of numbers because of the many payment cards issued and the increased number of new fintech firms. Because of this, the ISO decided to switch to eight-digit BINs in 2022. Any six-digit BINs from pre-2022 remain valid, but new BINs are required to have eight digits.
IIN vs. BIN
Internationally, IIN is often used interchangeably with BIN and is the preferred term. BIN is the older term for this number, which is more commonly used in the United States.
What Is a BIN Number Used For?
The bank identification number tells where the card is issued, the account number, and the brand of the card. All of these details help with fraud prevention, card authentication, routing transactions, and risk analysis. In addition, the added information about the issuer and country of origin helps merchants to determine the potential risk profile of each transaction.
BIN numbers are essential for carrying out the following important tasks.
| Description | Benefit | |
| Routing Transactions | The BIN number helps to direct payments through the issuer bank and network. | Fast, accurate payment processing |
| Fraud Prevention | These numbers make it easier to spot suspicious or fraudulent transactions. | Fewer financial losses for merchants and consumers |
| International Transactions | The BIN helps to identify the card issuer’s country of origin. | Increased acceptance rates and easier global transactions |
| Risk Analysis | Thanks to the information on the issuer, card type, and region, it’s easier to analyze the potential risk involved in each transaction. | Decreased rate of chargebacks |
| Authentication | Having a BIN confirms the legitimacy of the card. | Enhanced online and offline trust between different parties in a transaction. |
Benefits of Using a BIN Number
Thanks to the existence of BIN numbers, merchants can enjoy a few key benefits. With BINs, you can speed up the approval process and have an easier time verifying customers. The essential information is already available, which ensures a faster settlement process.
Bank identification numbers can also save merchants money. Since the institution and issuer are known, your payment processing tools can route the transaction through the most efficient path. Because BINs prevent fraudulent transactions, your company can save money on chargebacks.
Additionally, BINs provide important information about which customers frequent your shop, where they received their card from, and similar data. You can analyze this information to gain a better understanding of the people who come to your business.
How Does a BIN Number Help With Fraud?
Because BIN numbers help you verify customer data, they help you prevent fraudulent transactions from taking place. They make it easier to assess the risk of different transactions by giving you more information.
In addition, BINs can provide important information about data breaches and security risks. If every fraudulent transaction comes from one issuer, it indicates that the issuer may have a data breach. You can also use BINs to determine which institutions have the highest rate of chargebacks and then adjust your fraud prevention tools accordingly.
What Can You Learn From a BIN Number?
Since the 1970s, BIN numbers have provided merchants with important information about where a card is from. With this information, merchants can verify the card’s authenticity and prevent fraudulent charges. By looking at the BIN number, you can understand the following information.
- Issuing bank
- Type of card
- Card brand
- Issuer location
- Card level
Final Thoughts
While the bank identification number may appear to be innocuous, it’s actually an important tool for preventing fraudulent transactions and chargebacks. However, it’s essential to keep in mind that this is just one method for preventing fraud. By partnering with a top-rated payment processor, you can get enhanced fraud prevention tools and protect your business from theft.
At PayCompass, we understand how daunting it is to find the right payment processor. Thanks to our personalized merchant accounts and excellent fraud prevention, you can have an easier time managing your transactions. In our unified platform, you can easily track payments and take advantage of our advanced fraud prevention tools.
For more information on our payment process plans, reach out to our payment experts today.
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