Bank Identification Number (BIN)
What it is:
A bank identification number (BIN) identifies and verifies parts of a bank transaction.
How it works/Example:
For example, when you purchase something with your Visa card, the credit card (i.e., whether it's a MasterCard, Discover, Visa card or one from a department store) and the bank that issued the card.
When an electronic system validates a card transaction, part of the process is checking a database of BINs. (The American Bankers Association assigns and distributes BINs.) It keeps these BINs in a secure, nonpublic database. The configuration and data in the database can vary by country (for instance, BINs are only four digits in some countries).
Why it matters:
BINs help merchants track where transactions are coming from, and their use has helpedand card transactions proliferate in recent decades. They are fundamental parts of accepting or declining a card transaction.