If you're considering issuing your own cards, one of the first steps is to obtain a Bank Identification Number (BIN).

BINs are the initial four to six digits found on payment cards and play a vital role in payment card transactions by identifying the issuing institution, determining the card type and level, and facilitating transaction routing. Without a BIN, it would be challenging to determine the source of funds and process transactions securely.

To ensure you select the most suitable BIN option for your specific requirements, it's important to have a clear understanding of the different types available. In this article, we'll delve deeper into BINs to help you make informed decisions.

How can you obtain a BIN?

There are two primary methods for obtaining a BIN: through a network licence or by using a BIN sponsor.

1. Network licence 

Acquiring a licence with card networks such as Visa or Mastercard enables you to directly access their payment infrastructure, issue payment cards under your own brand with a BIN, process transactions, and manage cardholder accounts. However, this process can be intricate, involving eligibility criteria, demonstrating financial stability, and complying with various requirements. It may also require AML audits and robust risk management capabilities, as compliance is a core focus. Additionally, as card networks have multiple issuers, presenting a well-defined business plan targeting unique market segments and use cases might be necessary to demonstrate that your solutions don’t strongly compete with their existing issuers.

2. BIN Sponsor 

Alternatively, non-bank entities and fintech companies without their own banking licences can opt for a BIN sponsor. This is a preferred choice for brands seeking faster launch timelines, as obtaining a BIN through a sponsor is generally quicker than acquiring a network licence. A BIN sponsor provides regulatory sponsorship and infrastructure, enabling entities to issue payment cards under the sponsor's framework. Many BIN sponsors, including new-age fintech companies like Reap, often offer program management services that assist with partnership facilitation, technology integration, and other operational aspects of the card program. We offer Card-as-a-Service (CaaS) solutions that make it easier for you to launch your own card effortlessly.

Card characteristics identified by BINs

BINs provide valuable insights into the characteristics of a payment card. Here are some of the key attributes that BINs help identify:

1. Card Issuer 

BINs provide information about the financial institution or bank that issued the card. Each card issuer has a unique BIN range assigned to them, which allows for quick identification during the transaction process. This also helps with routing the transaction to the correct institution for authorisation and processing. When a payment is initiated, the BIN helps determine the appropriate network or payment processor to handle the transaction.

2. Currency

BINs indicate the billing or denomination currency of the card. 

3. Card type

BINs can determine whether the card is a debit, prepaid, or credit card. They can also differentiate between retail and commercial cards. Retail BINs are associated with cards issued for personal use, while commercial BINs are used for business purposes. Different types of BINs offer distinct features and benefits suitable for their intended use.

4. Product

BINs further classify cards based on their product level. For example, a BIN might indicate whether the card is Platinum, Signature, or Infinite. These distinctions can impact the card's rewards, benefits, and access to exclusive services.

The ability to identify these features also helps with fraud prevention. By analysing the BIN, payment processors and merchants can assess the risk associated with a transaction. BIN databases contain information about the issuing institution, card type, and country of origin, which helps identify potential fraudulent activity. At Reap, we assign BINs to our customers based on these characteristics. Additionally, we assign BINs to our clients based on their usage preference, distinguishing between shared and dedicated BINs.

Breaking down the BIN

When you examine the 16-digit PAN (Primary Account Number) on your card, you can easily determine your card's BIN number by focusing on the first 6 digits. Let's take a closer look at an example using the BIN number 414631 to understand what it represents. Card networks worldwide would recognise BIN 414631 as follows:

• Built on the Visa network 

• Issued by Reap

• Reap is an issuer from HK

• This card’s billing currency (denomination currency) is HKD

• This is a Visa Business Platinum Card

This information is also publicly available online. 

Types of BINs

1. Dedicated vs Shared BIN 

BINs can be categorised as either dedicated or shared, depending on how they are utilised by organisations. A dedicated BIN is exclusively assigned to a single organisation, providing them with greater flexibility and customisation options for their customers. For example, organisations can personalise branding elements within the 3D Secure screen, an authentication method that enhances the security of credit card transactions by protecting against fraudulent activities. Moreover, they have the freedom to customise card chip usage settings and more, tailoring the BIN to their specific needs.

Larger organisations often opt for a dedicated BIN to ensure optimal performance of the BIN, as it remains unaffected by other organisations sharing the same BIN under a BIN Sponsor. This is crucial because they have limited control over the fraud rates of these other organisations. If a company with high fraud rates shares the same BIN, it could lead to the entire BIN being blocked by merchants, not just the specific range used by that particular company.

On the other hand, a shared BIN is generally more cost-effective and efficient to use. Organisations seeking a faster time-to-market would choose the shared BIN option, as it is readily available for use, whereas obtaining a dedicated BIN would involve a longer application process.

2. Retail vs Commercial BIN 

A retail BIN is assigned to cards issued for personal use, while a commercial BIN is used for cards issued for business purposes. While each type of BIN can carry different features and benefits suitable for its intended use, there is not a whole lot of difference between retail vs commercial BIN.

The only differences you should be aware of are:

1. Card Type 

A retail BIN generates VISA Platinum cards, while a commercial BIN generates VISA Business Platinum cards. This has implications on the logo printed on the physical card, and perhaps some access to rewards Visa gives out based on card type.

2. Correct Marketing 

Visa mandates that our clients must correctly market based on their card type. For example, those who intend to market to retail customers must be using a retail BIN.

If you’re interested in launching your own card program and need a BIN Sponsor, connect with the Reap team to learn more.