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CREDIT CARDS DEFINITIONS G - Z

What Is a Bank
Identification Number
(BIN), and How Does It
Work?
By JULIA KAGAN Updated June 07, 2023

Reviewed by JANET BERRY-JOHNSON

Investopedia / Mira Norian

What Is a Bank Identification Number

(BIN)?
The term bank identification number (BIN) refers
to the first four to six numbers on a payment card.
This set of numbers identifies the financial
institution that issues the card. As such, it matches
transactions to the issuer of the card being used.
BINs can be found on various payment cards,
including credit cards, charge cards, and debit
cards.

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The BIN system helps financial institutions identify

fraudulent or stolen payment cards and can help
prevent identity theft.

KEY TAKEAWAYS
A bank identification number is the first
four to six numbers that appear on
payment cards.
BINs are found on credit cards, charge
cards, prepaid cards, debit cards, and gift
cards.
The BIN helps merchants evaluate and
assess their payment card transactions.
The number allows merchants to accept
multiple forms of payment and allows
transactions to be processed faster.
BINs can help financial institutions
identify fraudulent or stolen cards and
prevent identity theft.

How Bank Identification Numbers (BINs)

Work
The bank identification number is a numbering
system developed by the American National
Standards Institute (ANSI) and the International
Organization for Standardization (ISO) to identify
institutions that issue payment cards. The ANSI is
a nonprofit organization (NPO) that creates
business standards in the U.S. while the ISO is an
international nongovernmental group that creates
standards for various industries. [1] [2]

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All payment cards come with a BIN number. This is

a set of four to six numbers randomly assigned to
debit cards, credit cards, charge cards, gift cards,
electronic benefit cards, and other payment cards.

The number is embossed on the front of the card

and appears in print just below as well. The first
digit specifies the major industry identifier. The
digits that follow specify the issuing institution or
bank. For example, Visa credit cards start with a
four, which falls under the banking and financial
category.

When a customer makes an online purchase, the

customer enters their card details on the payment
page. After submitting the first four to six digits of
the card, the online retailer can detect which
institution issued the customer’s card including:

The card brand or Major Industry Identifier,

such as Visa, MasterCard, American Express,
and Diner's Club
The card level, such as corporate or platinum
The card type
The issuing bank's country

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When the customer initiates a transaction, the

issuer receives the authorization request to verify
if the card and account are valid and whether the
purchase amount is available. This process results
in the charge being either approved or denied.
Without a BIN, the credit card processing system
would be unable to determine the origin of the
customer's funds and would be unable to
complete the transaction.

Important: The BIN number allows

merchants to accept multiple forms of
payment and allows faster processing of
transactions.

What Are BINs Used for?

BINs have a variety of useful applications. The
primary purpose is to allow merchants to evaluate
and assess payment card transactions.

They also allow merchants to identify originating

banks along with their address and phone
number, and whether issuing banks are in the
same country as the device used to make the
transaction. It also verifies the address provided
by the customer.

But more importantly, the numbering system

helps identify identity theft or potential security
breaches by comparing data, such as the address
of both the issuing institution and the cardholder.

BINs are also used to increase the speed and

efficiency of checkout when paying with a debit or
credit card. As a customer swipes their card, the
store's payment processor scans the BIN on their
card and validates their account with the card
issuer. This also determines if the transaction is
authorized and compliant with any relevant
national laws.

FAST FACT
Bank identification numbers are also
commonly referred to as issuer
identification numbers (IINs).

Example of a Bank Identification

Number (BIN)
Here's a hypothetical example to show how BINs
work. Let's say a customer uses their bank card at
the gas pump when they fill up their tank. Once
they swipe the card, the system scans the BIN to
detect the specific institution that issued the card.

An authorization request is then put on the

customer's account. The request is authorized
within a few seconds and the transaction is
approved if the funds are available or declined if
the customer doesn't have enough funds to cover
the charge.

What Is a Bank Identification Code?

A bank identification code, which is also known as
a bank identifier code, is a special code made up
of eight to 11 digits. It is an international standard
that identifies a bank or non-financial institution
whenever someone makes an international
purchase or transaction. A BIC can be connected
or non-connected. The former is part of the SWIFT
network and is called a SWIFT code, while the
latter is generally used for reference only.

How Do You Use a Bank Identification

Number?
Consumers generally don't use BINs but it is
important to know what they mean. The first digit
is the major industry identifier while the remaining
digits specify the issuing financial institution.

When you make a purchase or transaction, the

issuing institution receives a request for
authorization. This request attempts to verify the
legitimacy of the account and whether the funds
are available. If everything checks out, the
transaction is approved. If not, the institution
declines it.

What Is BIN Scamming?

BIN scamming is a fraud scheme. It occurs when a
fraudster calls impersonating someone from your
bank, claiming that your account information has
been compromised. The scammer may give you
information to try to gain your trust. Once you're
hooked, they try to confirm the number of your
card and begin by asking where you bank.

When they have that information, they give you

the bank identification number and ask that you
confirm the remaining digits on the card along
with any other information they can get from you.

Why Are BIN Numbers Important?

BINs allow merchants to accept multiple
payments at the same time. They also make
payment processing much faster.

BINs help banks and financial institutions identify

cards that have been compromised or stolen
because it provides information about the type of
card being used, the type of bank, and other
information about the issuing company and
cardholder.

The Bottom Line

Bank identification numbers are used to identify
which payment cards belong to which issuing
financial institution. But aside from that, they help
facilitate financial transactions and ensure that
consumers are protected from identity theft and
fraud. That's why it's so important to keep your
financial information, including your BIN,
confidential.

Remember, your bank will never call or send you

an email to inform you that your account
information has been compromised. If you ever
receive a call, don't engage with the scammer.
Instead, hang up and notify your bank. You can
also file a complaint with the FTC on the agency's
website. [3]

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ARTICLE SOURCES

Related Terms
Issuer Identification Number (IIN):
Definition and Examples
The issuer identification number (IIN) is the first few
digits of a payment card number issued by a financial
institution. more

Primary Account Number (PAN): What

It Is & How It Works on Cards
A primary account number is a unique identifier for a
credit, debit, or other form of payment card. more

What Is a Chargeback? Definition,

How to Dispute, and Example
A chargeback is a charge that is returned to a payment
card after a customer successfully disputes an item on
their account transactions report. Learn more. more

Visa Card: Definition, Types, How

They Work, vs. Mastercard
Visa is a major card network but doesn't issue credit
cards itself. Cards with the Visa brand include credit,
debit, prepaid, and gift cards. more

Credit Card Authentication: What It Is

and How It Works
Credit card authentication is a way of verifying that a
person attempting a credit card transaction is who they
say they are and that they are authorized to use that
card. more

Personal Identification Number (PIN):

What It Is, How It's Used
A personal identification number (PIN) is a numerical
code used in many electronic financial transactions,
providing additional account security. more

Related Articles
DEFINITIONS G - Z
Issuer Identification
Number (IIN): Definition and
Definitions G - Examples

DEFINITIONS G - Z
Primary Account Number
(PAN): What It Is & How It
Definitions G - Works on Cards

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Credit Cards vs. Debit Cards:
What’s the Difference?
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Credit Card Authentication:
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