A bank identification number or BIN is a 6-digit number that identifies the card issuer within the payment system during authorisation and processing.
The BIN system was developed by the International Organisation for Standardisation (ISO) in collaboration with the American National Standards Institute (ANSI) as a way to identify institutions that issue credit, debit and other types of bank cards. Each digit of the bank identification number carries the information necessary to authorise and process card transactions.
Aside from banks, other financial institutions are also empowered to issue cards. That’s why BIN is also known as an issuer identification number (IIN).
Every time a customer swipes their card or enters the card details to pay, the issuer receives an authorisation request to confirm that the bank account is valid and has enough funds to withdraw. In the payment processing cycle, the BIN is used to determine which bank the authorisation request should be directed to, the type of card used, the geographic location of the bank, and other useful information.
Since the bank identification number is used to cross-check information between card networks, banks, and other financial institutions, the average user rarely interacts with the BIN. Most often, it’s simply entered during the checkout along with the full card number to complete an online transaction.
Bank identification number helps merchants and card networks quickly check all important information needed to process the payment, in particular:
Verifying the above points helps the payment system protect against card fraud and process transactions smoothly. In addition to identification purposes, a bank identification number is often used by merchants to analyse processed payments in terms of geolocation and payment method used. For example, if you know that a large number of payments are made using the cards of a particular bank, then it makes sense to cooperate with it to ensure cost-efficient payment processing.
Although the bank identification number isn’t of particular value to the average user, it’s quite easy to find it. Any bank card number begins with this combination of numbers. Knowing the decoding of each number in the BIN, you can easily find out all the information you are interested in.
The first digit of the BIN indicates the type of institution that issued the card. In the banking industry, they call it the Major Industry Identifier (MII).
Here’s what industries the MIIs represent:
The second to fourth of digits are referred to the bank identification number or issuer identification number (IIN). They clarify which bank or financial institution owns the card and which card network it belongs to.
The rest digits of the bank identification number are generated by the payment system as a unique set of numbers that designate an individual card account. These digits cannot match with other card numbers issued by the same institution. It is possible for each card issuer to generate a trillion of unique numbers for their clients.
For bank cards, the fifth and sixth digits are assigned in accordance with the bank card category. For example, Classic, Gold, Maestro, Platinum, etc.
Some sophisticated fraudsters can take a valid bank identification number and try to generate the remaining digits of the card number in order to test it with small transactions and see if it is possible to withdraw money from it. This type of payment fraud is called card testing. However, in order for such a scheme to work, not only the card number is needed, but also other data, such as the CVV/CVC code and issue date. It’s usually quite difficult to guess them, especially in the case of cards with dynamic CVV/CVC.