What is BIN sponsorship?

BIN sponsorship allows fintech businesses to access the payment processing and card management services provided by the likes of Visa or Mastercard without going through the process of joining a major card scheme.  

BIN sponsors play a vital role in the card issuing process, giving new card products a much quicker and more affordable route to market, and providing the expertise and support their clients need to scale.

In this article, we explain exactly what a BIN sponsor is, how it fits into the payments ecosystem, and which businesses need a BIN sponsor.

What is a BIN?

A Bank Identification Number, or BIN, is the first 6/8 numbers of the long number sequence on the front of a payment card, otherwise known as the Primary Account Number (PAN). It identifies the card issuer and ensures the processor can correctly route the payment for authorization, clearing and settlement. BINs also make it easy to issue refunds and chargebacks, and help combat fraud by matching the location of the cardholder with the person attempting payment - all while keeping data secure.  

Read more: What is a BIN attack?

What is a BIN sponsor and what do they do?

A BIN sponsor is an organization, such as a card issuer, that, as a member of one of the major card schemes (Mastercard, Visa, American Express), is able to offer services to their clients, usually fintech businesses that want to offer payments solutions such as branded cards.

The advantage of this is that businesses don’t have to go through the lengthy process of obtaining regulatory licenses, filling in forms, paying fees, and undergoing due diligence and compliance checks that joining a card scheme requires. It also means the sponsor can offer card payment solutions to their clients at a much lower cost.

So, the BIN sponsor handles processing payments, complying with regulation, as well as monitoring and following the rules of the card scheme they belong to, leaving their client to focus on building and running their payments product without having to form a direct relationship with the scheme.  

How does BIN sponsorship fit into the wider card issuing process?

BIN sponsorship is a crucial component of the card issuing process, acting as an intermediary between big card schemes and smaller fintech companies, but there are a number of other parties that are crucial to the success of the whole enterprise. Here’s how it all fits together:

• The BIN sponsor sponsors the participation of the fintech business in the card network, enabling them to issue cards.
• The card manufacturer creates, brands and distributes the cards to the fintech business.
• The issuer processor looks after payment processing and card management.
• The program manager is responsible for the whole end-to-end process, ensuring card payments can be taken successfully and securely.

Who needs a BIN Sponsor?

Any fintech business that wants to issue their own card product but lacks the infrastructure and capacity to become a licensed issuer needs to work with a BIN sponsor.

This could be a digital banking startup that needs to offer a virtual card and mobile wallet, a prepaid card, or a loyalty card.

When choosing a BIN sponsor, businesses should check the organization has all the necessary permissions and licenses to operate, is compatible with their intended solution, has the potential to scale alongside their growth and, ideally, has some expertise in their niche.

BIN sponsors in turn require businesses to have a viable proposition, strong financials, and to be compliant.

Launch your card program with Checkout.com

By partnering with Checkout.com, you’ll gain access to everything you need to successfully launch your card product.

Our issuing solution oversees every element of the process, acting as a card issuer, issuer processor, and card program manager, so you can focus on launching and scaling your program without the hassle of entering into multiple partnerships.

Find out more about Checkout.com’s issuing product.