The BIN sponsor role
28 October 2016
Discover the main missions and the role played by BIN Sponsorship companies, such as Treezor, to support their customers in their payment card issuing project.
What is BIN Sponsorship?
On a credit card is usually 13 to 16 digits, called the PAN (Primary Account Number), which correspond to the customer’s account number. It represents a code and identifies not only the cardholder but also the card issuer. Among these numbers is the issuer’s identification number (IIN or BIN), which is specific to the issuer. This bank identification number (BIN) is made up of the first 4 or 6 digits on a payment card and identifies the issuing bank. A card issuer can have several BINs (bank identification number) and each category of registered activity (prepaid, corporate, private label…) can have its own type of BIN.
The BIN is assigned by a network (scheme) such as Mastercard or Visa to a main member who can then offer it to its partners.
The function of the BIN
When a payment card is swiped through a payment terminal or used on a website to pay, the transaction process includes analyzing the BIN to route and authorize the transaction. The validation process usually uses an algorithm, such as Luhn’s algorithm, which summarizes the numbers on the card.
What is a BIN Sponsor?
A BIN Sponsor is a company that has obtained the necessary approvals from the banking supervisory authorities and is a principal member of the Visa or MasterCard networks to receive and assign card numbers. The BIN Sponsor is usually a credit institution (Bank) or a licensed electronic money institution (e.g. Treezor).
The BIN Sponsor has the ability to delegate all or part of a range of BINs to organisations that are not financial institutions and that wish to offer card programmes to their customers.
Regulations allow the BIN Sponsor to issue cards in markets other than its country of domicile. For example, a French BIN Sponsor can manage card programmes within the European Union. More generally, a BIN corresponds to a user segment (Consumer, Business etc.), a geographical area and one or more currencies.
The BIN Sponsor missions
The BIN Sponsor implements the BIN user with the Visa and/or Mastercard networks. It must ensure that the products marketed are in compliance with banking regulations. Most companies approach a BIN Sponsor to delegate the regulatory aspects, to launch a card program at a lower cost and quickly. Indeed, the procedure to become a BIN and connect to a payment system is long (about a year).
Here is the list of the main responsibilities of the BIN Sponsor:
- To present high equity capital
- To be in compliance with regulatory authorities
- Be a member of a network (Mastercard and/or Visa)
- Validate and monitor program compliance with networks