Definition: A Bank Identification Number, or BIN, works to protect both merchants and consumers in the online marketplace. Every credit or debit card contains a BIN, typically the first four to six numbers on a bank-issued card. These numbers easily identify the type of card being used, the geographic location of the card issuer and which bank or company issued the card.

BINs are also referred to as IIN (Issuer Identification Number), since not all cards are issued by banks. Institutions such as American Express issue cards that incorporate BIN data as well as many prepaid and virtual gift cards like PayPal, Walmart and netSpend.

How BINs Work

Every online purchase that requires a payment is completed through a two-step process: authorization and clearance. A BIN works to complete the first step in the payment process: authorization. The BIN identifies which issuer, typically a bank or credit card company, should receive the request for authorization to determine if the account or card is valid and whether the amount of the purchase is within available limits on the card.

The authorization process happens very quickly behind the scenes as numbers are checked against a third party service provider. For many ecommerce retailers, their payment processor handles BIN checks against BIN lists they manage or subscribe to.

BINs increase the speed and safety of card validation

BINs make the checkout process smoother, avoiding errors and increasing efficiency by adding another level of security and authentication to the checkout process. BINs perform many roles, including:

  • Help to identify the purchaser by offering an additional signal
  • Confirm inline validation by asking the customer to enter their credit card number as well as the type of credit card they are using
  • Ensure compliance with export laws by identifying the card-issuing country
  • Protect monthly payment programs by identifying prepaid credit cards where only the first payment may be covered
  • Save time by validating whether or not a credit card is accepted by a particular online merchant before sending for authorization

In addition to fraud protection, BINs have made shopping online a possibility for consumers by providing a secure payment process.

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