Every debit card and credit card comes with a bank identification number, or BIN, which represents the first 4-6 digits that help to identify the financial institution that has issued the card. This is why BIN is also referred to as IIN (Issuer Identification Number).
A BIN is a security measure to safeguard consumers and merchants involved in online transactions. For any online transaction to be successful, two steps must be completed first: Authorization and Clearance.
A BIN helps with the authorization part, as it identifies the card issuer and sends an authorization request to confirm the account validity, card validity, and the transaction amount is within the issued limit. The authorization request approval process happens within seconds because it is automated. Once the request is approved, the payment gets cleared for a successful online transaction.
A BIN holds the utmost importance because it:
- Aids in identifying the purchaser
- Confirms inline validation
- Keeps monthly payment programs hassle-free
- Promises payment security without consuming much time