Bank Identification Number - Explained
What is a Bank Identification Number?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Table of ContentsWhat is a Bank Identification Number?How Does a Bank Identification Number Work?Authorization
What is a Bank Identification Number?
The bank identification number (BIN) is a unique identifier of the institution, and it is the first four to six numbers engraved or printed on the credit cards. BIN is unique and only identifies the issuing bank. When processing matching transactions to the issuer of the charged card, BIN is very critical. The system numbering of BIN is similar to that used on a charge, prepaid, debit, gift, and other electronic benefit cards.
How Does a Bank Identification Number Work?
The use of Bank identification numbers is also used by other organizations such as the American Press. Issuer Identification Number (IIN) is commonly used interchangeably with BIN. Identification of identity theft or potential security breaches by comparing data, such as the address of the institution issuing the card and the address of the cardholder is facilitated by the BIN numbering system.
American National Standards Institute and the International Organization for Standardization (ISO) developed BIN to assist in the identifying the institutions issuing bank cards. The first digit of the BIN specifies the Major Industry Identifier (MII), such as airline, banking or travel, and the next five digits specify the issuing institution or bank. For example, the MII for a Visa credit card starts with a 4. Business people, in assessment and evaluation of card payment transactions use BIN. BIN enables business people to identify which bank the source of money, the address and phone number of the bank when the issuing bank is in a similar country as the device used to make the transaction and verifies the address information provided by the customer. The number allows merchants to deal with several payment forms while fastening transactions processing. Customers paying for online goods and services need to inputs personal details on the payment page. After submitting the first four to six digits of the card, the online retailer can detect which company issued the customer's card, the card brand, for example, Visa or MasterCard, the card type such as a debit card or a credit card, the card level such as corporate and the issuing bank country.
BIN identifies which issuer receives the authorization request for the transaction to verify if the card or account is valid and whether the purchase amount is available on the card and this process results in the charge being either approved or declined. For instance, when a customer swipes a card at the gas pump, there is a scanning of the numbers by the system to identify the specific issuing company that withdraws the money. The authorization request is put on the customers account after which request validation occurs, and transactions approved immediately. When there is a failure by the system to identify the source of customer's funds, the transactions without the BIN's completion.