BIN sponsorship is a single compliant connection between an organisation and the card scheme network, enabling transactions to be processed and cardholder funds settled. In simple terms, our role as an e-money institution means that organisations can perform many of the operations of a financial institution through us. This can sometimes be referred to as an Issuing BIN.
BIN stands for Banking Identification Number. The Banking Identification Number refers to the initial set of four – six numbers within the long card number shown on the front of a payment card. See the Card number in the following diagram for reference.
This set of numbers helps to identify the institution that issues the card, and is really important for making it easier to match transactions to the issuer to ensure a smooth customer journey. If you want to understand who issued the card used to make a payment?
Below is an example of what the first 8 digits of a scheme card shows about the card.
Sponsorship refers to the relationship the client and issuer of the BIN have. The issuer providing the BIN is a direct scheme member of one or many of the major card schemes (Mastercard, Visa, UPI etc) and has joined the card scheme as a member so they can ‘sponsor’ their clients to use scheme approved BINs and account ranges.
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BIN sponsorship is an easy way for companies to launch a scheme based payment service (such as Mastercard) without having to go through the lengthy application processes to become a scheme member. It enables you to get started quicker in offering your own custom built fintech solution. It is a more hands on approach to providing customized credit card offerings as you will need to build your own services to interact with customers, debt collection, treasury, compliance etc.
Working with a principal scheme member like 1derful ensures that your card programme adheres to the scheme rules and regulatory requirements. We also guide you through the BIN setup process, performs the scheme and regulatory reporting, performs compliance as an ongoing task, all to help you deliver a compelling programme.
Bank Identification Number (BIN) – A BIN or issuer identification number (IIN) is a six-digit number assigned in association with an ICA number and typically used to identify an issuing or acquiring portfolio for transaction authorization and clearing purposes.
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.
As an example:
Visas typically start with a 4 and Mastercards typically start with a 5. When you get a BIN range for Mastercard, you can opt to get BINs in a few different ways. You might choose to have a dedicated BIN range for your brand, or may choose to have a sub range where you may choose to share.
As BINs are easily discovered, you should be mindful of how that information can be used for attacks on your customers.
A BIN Attack involves a fraudster taking the first six numbers of a card (the Bank Identification Number or BIN) and then using software to automatically generate the remaining numbers and test these combinations to see which card numbers are correct and if the cards are active
To defend against this you would want your processor to block cards after a certain number of CVV (CV2) attempts.
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.
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.
Card schemes are payment networks linked to payment cards, such as debit or credit cards, of which a bank or any other eligible financial institution can become a member. By becoming a member of the scheme, the member then gets the possibility to issue cards or acquire merchants operating on the network of that card scheme.[1][2]UnionPay, Visa and MasterCard are three of the largest global brands, known as card schemes, or card brands. Billions of transactions[3] go through their cards on a yearly basis.
The card schemes come in two main varieties - a three-party scheme (or closed scheme) or a four-party scheme (or open scheme).
Taken from https://trimplement.com/blog/2022/03/online-card-based-payments/
Once you organize your BIN range provider you will need to look to a payments processor. This is a service that 1derful also provide. A payment service can help you to minimize your PCI requirements by creating a lower touch model where you might be able to avoid handling card PANs and hence won't need a card data environment [https://listings.pcisecuritystandards.org/documents/Guidance-PCI-DSS-Scoping-and-Segmentation_v1.pdf]
By partnering with a provider such as 1derful for payment processing you gain a wealth of implementation experience in that given payment processor. We can provide
By partnering with a provider such as 1derful for payment processing you gain a wealth of implementation experience in that given payment processor; helping your card program launch smoothly. If you choose to go with a different scheme/payment processor then we support that too.
The greatest shortcut to launching a card program however is to fully partner, as full partnership will bring existing software products that will be cheaper than rebuilding yourself as vendors (including ourselves) are likely to spread the cost recovery across their client base.
Scheme providers constantly evaluate your usage of customer states to ensure alignment with the scheme providers best practices. This is why your payment processor choice and how you design your usage of their APIs is important. Quarterly customization over the top of a payments processor can be very costly and risky.
