Using Parrot: The Future of BINs and Why You Should Care

Summary

Six-digit bank identification numbers (BINs) have been the standard used to retrieve data on payment cards for a long time, but demand by issuers for more card numbers requires this value to be expanded by another two digits in order to account for growth in the industry. Those two digits will seriously impact your understanding of your customers and how you manage payment operations in the near future, so we encourage you to to start working with 8-digit BINs sooner rather than later.

Background

There are over 22 billion cards in circulation today across all the major payment networks. In the U.S. alone there are over 2 billion cards in circulation with the average American having about 3 in their wallet (2.7 in actuality, but that’s not practical).

The Nilson statistics above make clear that growth trends are not slowing, and the expectation is that there will be 30 billion cards in circulation by 2025. Relative to expectations set in the 1950s, this level of card issuance can only be seen as incredibly successful.There is a lot of demand for card numbers from a growing number of banks around the world, and as more individuals become “banked”, they’ll need a payment card to withdraw money and use their cash, use their card directly, or via their mobile phone.

It became necessary in the 1980s for many issuers to put rules and controls in place to prevent collisions and confusion globally across banks. In order to coordinate the orderly issuance of cards that can function globally, the International Organization for Standardization (ISO) started managing the rules and guidelines for issuing cards. This prevents—or at least minimizes the chance of—complicated problems where banks in certain countries issue cards that have the same number as banks in other markets.

In our documentation on BIN/IIN Data we note that card numbers are in high demand as more companies want to issue cards. The ISO has responded by deciding to expand the number space they control on a card from 6 digits to 8 digits which allows the BIN space to expand 10x each time: going from 6 to 7 digits increases the possible number of issuer BINs on Visa, for example, from 100,000 to 1,000,000, and going to 8 digits will increase it another 10x to 10,000,000 possible issuer BINs. This combined with the rest of the digits of the card number should provide banks, financial tech firms, and other companies issuing cards with the ability to provide enough accounts and still keep it manageable across the world. Meanwhile, smaller banks who don’t need all of their share of a card number range can give some back to the ecosystem.

What does this mean for me?

In short, the challenge with a transition from 6-digit BINs to 8-digit BINs means that there will be more issuers inside the 6-digit space than today (remember adding 2 more digits adds 100x more potential issuers). More issuers means more card types (credit, debit, prepaid), issuing banks (Chase, Capital One, Citi), and even countries, all associated with the same 6-digit BIN. This impacts the decisions you are making in your business around routing, fraud, cost analysis, and the like. Acquirers and issuers directly on the networks also have to get prepared to adjust their routing rules.

Here are some examples you might run into today if you only use a 6-digit BIN:

Multiple Product Types

Take a look at the MasterCard 6-digit BIN: 531001

If you query Parrot by Pagos you’ll notice that we return Germany as the country and Deutsche Kreditbank Aktiengesellschaft (“DKB”) as the bank. No issue here, but what you are missing is that there are several different card types issued in this range by DKB: 

6-digit BIN8-digit BINCard Product53100153100100MNW - World MasterCard Card53100153100130MPB-MasterCard Preferred BusinessCard Card

In this case, DKB has issued a World MasterCard and a Business Card in the same 6-digit range. You wouldn’t know this if you searched with only 6 digits, which could have some impact on truly understanding your customers’ payment preferences and designing your optimization strategy, cost management, and routing. 

Multiple Countries

Take a look at the MasterCard 6-digit BIN: 559917

If you query Parrot you’ll notice that we return Japan as the country and MITSUBISHI UFJ NICOS CO., LTD. as the bank. This is our best guess based on 6 digits given how large an issuer UFJ is, and inside the range of 559917 there are, in fact, 14 countries and 30 unique banks represented. MasterCard hints at this with the card product code’s MCC of “Mastercard Mixed” so you know there may be more details than the 6-digit BIN offers. Here are some examples of what you could be missing: 

6-digit BIN8-digit BINCard ProductBankCard Country55991755991700MCC - MASTERCARD MIXEDMITSUBISHI UFJ NICOS CO., LTD.Japan55991755991736MCC - MASTERCARD MIXEDCALTECH EMPLOYEES FEDERAL CREDIT UNIONUSA55991755991792MCC - MASTERCARD MIXEDHELLENIC BANK PUBLIC COMPANY LIMITEDCyprus

In this case, while you’ll know your customer is in a Mixed BIN via the product code, without 8 digits, you won’t know whether the card is in Japan, the US, Cyprus, or one of the other 11 countries in 559917.

Conclusion

It’s okay to still use 6-digit BINs for now, but given the pressure to issue more and more cards, time is quickly running out where 6 digits will be enough. It’s important to start to work with 8-digit BINs as you consider how to manage fraud, customer payment experiences, chargeback and dispute management, routing, cost analysis, and customer service (to name a few workflows important to payment operations). With that additional information you can clearly identify the card product that your customers are using and manage your operations accordingly.

We are happy to help if you have any questions!