The Guide to Bank Identification Numbers (BINs)
Cards are one of the most important sources of revenue for a fintech or embedded finance company, and securing a bank identification number (BIN) is a fundamental step in the process of issuing cards. These first several digits of a card number contain key information that help transactions to be routed properly.
Here is a basic overview of what fintechs need to know about BINs.
What is a bank identification number (BIN)?
A “BIN” refers to the first several digits of a debit, credit, prepaid, or other card. Also sometimes called issuer identification numbers (IINs), BINs identify the issuing bank of a card. The digits after the BIN number identify the individual card owner — in other words, the card user account. When a card is used, the card issuer receives a notification and proceeds to validate the charge.
For a fintech or other company that embeds banking services, card creation requires working with a card issuer (a bank) to get a BIN from a card network.
As the financial services industry grows, demand for BIN numbers is increasing. For that reason, Mastercard and Visa mandated their payment network to increase BIN numbers from six to eight digits in April 2022 to ensure there are enough BIN numbers to go around for the global card payments industry in the future.
Certain approaches can make securing a BIN easier for fintechs. For example, it is faster and less expensive for fintechs to share a BIN with other companies. That means the fintech owns a range of card numbers associated with a BIN, rather than owning the whole BIN.
In the case of shared BINs, the bank may already own a BIN and may be able to provide the fintech a BIN range, meaning a bank identification number section; each BIN range or extension holds one million distinct card numbers.
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How to use BIN numbers to issue a payment card?
Setting up a BIN requires the coordination of different parties. These include card issuers, program managers, processors, and card networks.
Card issuer: Card issuers are banks, and they receive a BIN from a card network such as Visa or Mastercard.
- Card network: The card network is the payment rail through which transactions are processed.
- Issuer processor: Issuer processors act as the interface between the card issuer and the card network. Issuer processors help authorize transactions, complete transaction settlements and identify potential fraud. Larger banks like Chase and Bank of America may have their own processors. Most banks that work with fintechs, however, work with third-party processors. When fintechs work with banking as a service (BaaS) provider Treasury Prime, the processor will either be Marqeta or FIS.
- Card program manager: Transactions can be routed through your card program manager, and your program manager can also be your link to your processor. Program managers help fintech programs with all things from card printers to ATM access. When fintechs work with Treasury Prime, we act as the program manager.
There are different ways to approach acquiring a BIN so your fintech can create cards for your users. The exact approach depends on your banking as a service (BaaS) provider and partner bank, and whether you get your own BIN or share one.
What is the easiest way to get BIN numbers?
The easiest way for a fintech or neobank to get a BIN is to share one. Doing so cuts several steps out of the process of creating a BIN, without sacrificing important features, and is a common practice among even the best fintech cards.
Let’s first look at what it takes to get your own BIN, then go over the BIN sharing process.
Getting your own BIN
Getting your own BIN means starting from scratch to secure a program, and deploy a BIN. The process of creating a new BIN can take months, involves a lot of back and forth, and can drag on longer if a party requests changes to the BIN before it is finalized. Sharing a BIN can happen much faster.
To get your own BIN, you might have to work with a card program manager to obtain one through an issuer. As part of this process, you must obtain network approval for the program by filing certain paperwork. When you work with Treasury Prime, we and our partners do this for you.
The process of programming a BIN also includes programming and tokenizing the BIN to improve security. Before a fintech can use a BIN to launch cards, the BIN must be programmed for consumer, small business, or commercial usage. Certain use cases also require special tokenization. For example, a BIN must be specially programmed to enable cards to be added to digital wallets, or for physical cards to embed contactless payments.
Because BINs take a long time to set up, creating a new one can delay the launch of a fintech card. That delay can result in a fintech startup burning through its runway of funding before they can start making money.
That said, as your company gets larger and has more flexibility with time and money, getting your own BIN could be worth it as it gives you more control over the card database and activity reporting. Procuring your own BIN may also be a good option if you are changing sponsor banks. When that happens, you will need to reissue cards to your customers with new BINs. Your customers will not be able to continue using cards supported by a bank that is no longer your partner.
Sharing a BIN
Sharing a BIN refers to purchasing a subset of card numbers from a larger established BIN. This bank issuer identification number list of card numbers is referred to as a BIN range. When you share a BIN, several steps in the BIN creation process are already taken care of, saving you time. Together, omitting these steps cuts months off your time to market for launching cards.
You don’t have to request the BIN from the card network, as the BIN number already exists and has been allocated to your card issuing partner bank.
- Your bank or card issuer will have already filled out network approvals to get you live faster.
- The BIN will already have been programmed and tokenized for your use case.
The biggest difference when you share a BIN is that your BIN range, or the portion of the BIN that you own, is by definition smaller than the whole BIN. That said, the number of card numbers at your disposal won’t in itself be small. A BIN range contains a million card numbers.
Aside from being capped at one million cards, a BIN range operates just like a regular BIN. It is completely separate from all other ranges on the BIN. Historically BIN-linked features and perks can be offered as add-ons to BIN ranges. So for example, you can offer rewards and warranties through a third-party “as a service” provider. You can use these kinds of providers if you own your own BIN, as well.
How Program Managers help you issue cards
Because fintechs must work with third parties to secure BINs, it’s important to choose the right partners. Card program managers tend to have existing relationships with processors and issuers, so who you pick as a program manager can determine what options are available to you in pursuing a BIN.
BaaS provider Treasury Prime typically serves as the card program manager for our fintech partners. Our processors are Marqeta and FIS.
We allow fintechs to contact their card processor and any other parties directly as we feel this openness is vital to fintechs’ growth. Any barrier to communication can cost fintechs valuable time during the critical early stages of establishing a company.
Not all card program managers allow fintechs this much freedom. Some won’t let you know who your card processor is. Others will let you know, but won’t allow you to contact them directly. This indirect communication setup increases the risk of miscommunication during the process of securing a BIN and makes it harder for fintechs to get questions answered.
Transparency is a broad principle for Treasury Prime and extends beyond processes involved in launching cards. We enable and encourage direct relationships between fintechs and their partner banks because the bank relationship is crucial to every fintech’s long-term success.
The bottom line on BINs
As a growing company in the competitive fintech space, getting your card to market fast should be a top priority. At the same time, you need to balance speed with the equally important matter of building a solid foundation for long-term growth. You need to get your product into the hands of users, but you also need to make sure you can sustain that product.
When it comes to BINs, you can gain speed by sharing a BIN when you first launch your card. Where you need to be careful is in choosing your partners. Choosing the wrong partner can lead to more work and costs in the long run. You need a card program manager who lets you talk to your processor, and a processor that is ready for the eight-digit BIN expansion.
Ready to launch a fintech card? Watch our webinar about getting to market fast with cards. Developers can also experiment with Treasury Prime’s API in our Sandbox, and our sales team is always available to answer your questions.