BIN sponsorship | How it can help your business

Key takeaways

• A BIN (Bank Identification Number) refers to the first six to eight digits of a payment card, which identifies the issuing institution (like a bank or card issuer).

• BIN sponsorship lets you use the BIN of a third party to issue cards, helping improve your financial service offerings to customers while concentrating on your core services.

• Airwallex, as a BIN sponsor, offers extensive global reach and secure infrastructure, providing a streamlined way to launch and manage card products.

Welcome to the world of card issuing, where BIN sponsorship is a key part of the financial ecosystem. If you’re looking to issue payment cards, BIN sponsorship is not just a technical requirement, but a strategic advantage. It lets you navigate the complexities of financial regulations, expand your market reach, and offer customised card products to your customer base.

Whether you’re a fintech startup, a retail giant, or a service provider, BIN sponsorship can accelerate your growth and open doors to new opportunities. Let’s explore how BIN sponsorship can transform your business.

What is a BIN?

A financial institution is assigned a unique BIN, or Bank Identification Number, which is used to identify the institution during financial transactions. It's a six-digit number, and is always the first six digits on a credit or debit card issued by the bank or financial institution.

BINs are important for both local and international transactions. When a card is used across borders, the BIN ensures the transaction is channelled through the appropriate card network, such as Visa or Mastercard, and to the correct issuer. This international capability is essential when aiming to broaden your market reach and cater to a diverse customer base.

To meet strict requirements for traceable, secure transactions, regulatory bodies mandate the use of BINs. By pinpointing the issuer and network, BINs ensure all transactions adhere to the necessary legal and security protocols.

What is a BIN sponsor and what do they do?

A BIN sponsor serves as the bridge between card issuers and payment networks. They are financial institutions or fintech firms with established ties to major payment networks such as Visa and Mastercard, who allow third parties to use their own BIN to issue payment cards. By aligning with a BIN sponsor, you can tap into these connections to issue cards without the need to build your own banking framework.

For example, Airwallex as a BIN sponsor, lets you provide card products as part of your offering to your own customer base, and issue Visa cards using our BIN. This means that Airwallex handles all the regulatory and security compliance, card production, and transaction processing for you.

The financial sector is a tightly regulated environment, and ensuring your card programs are in line with these rules is no small feat. BIN sponsors, like Airwallex, shoulder the weight of these administrative and compliance challenges, freeing you to focus on your business's strengths. From safeguarding cardholder data to upholding anti-money laundering (AML) and Know Your Customer (KYC) regulations, a sponsor's expertise ensures your card programs are compliant, minimising the threat of legal entanglements and financial penalties.

BIN sponsors also facilitate international transactions. Whether it’s a prepaid card for travellers, a gift card for international eCommerce, or a corporate payment solution for multinational companies, a BIN sponsor ensures that these cards can be used seamlessly across different countries and currencies. This global capability is particularly valuable if you operate in multiple markets or serve a diverse customer base. By providing the technology integration necessary for seamless card issuance and management, BIN sponsors help you overcome the technical and logistical challenges of operating internationally.

Who needs a BIN Sponsor?

Not every business requires a BIN sponsorship, but for those that do, the benefits are huge. Startups and fintech companies, in particular, often find themselves in a unique position, wanting to offer payment cards to customers, but lacking the necessary banking infrastructure or licences. Issuing payment cards independently requires a significant investment in technology, compliance, and regulatory frameworks, which can be a daunting task for young companies. A BIN sponsor can bridge this gap by providing the necessary infrastructure and support, allowing you to focus on your core competencies.

The ability to offer payment cards can be a game-changer for startups, improving product offerings and serving as a key differentiator in a competitive market. By partnering with a BIN sponsor, startups can launch card programs quickly. This accelerates time-to-market and reduces the initial financial burden, making it a more viable option when you have limited resources.

For established companies, the benefits of BIN sponsorship are equally compelling. When expanding into new global markets, the complexities of local regulations and the need to build local partnerships can be daunting. A BIN sponsor can provide the support and expertise needed to ensure that your card programs are compliant with local regulations and that they meet the needs of your customers.

BIN sponsorship in the wider card issuing process

To fully appreciate the significance of BIN sponsorship, it is important to understand the broader card issuing process. This process is a complex system that involves a variety of stakeholders, including card issuers, payment networks, and regulatory bodies. Here’s a detailed breakdown of each step, with a focus on the role of the BIN sponsor:

1. Card programme setup

The journey begins with the card program setup, where you (the issuer) define the product’s features, such as the type of card (credit, debit, prepaid), target audience, and business model. This is a critical phase, as it sets the foundation for the entire card issuance process. The BIN sponsor often acts as the primary partner, facilitating the setup process and providing necessary documentation and support, and provides guidance on regulatory requirements and helps ensure the card program is compliant.

2. BIN acquisition

Once the program is established, the next step is to acquire a BIN. This is where working with a BIN sponsor comes in. They've already acquired a BIN from a regulatory body (e.g., Visa, Mastercard). The sponsor provides you with their BIN to use.

3. Card production

Once the BIN is secured, the next step is card production. This involves designing the physical or digital card and ensuring that the card meets the technical specifications required by the payment network. The BIN sponsor often provides the necessary infrastructure and support to streamline this process, making it easier for you to bring your products to market.

4. Transaction processing

Once the cards are produced, the next phase is to integrate the card program with payment processing systems to handle transactions. A BIN sponsor like Airwallex facilitates secure and efficient transaction processing. This includes payment authorisation to verify the cardholder's information and available funds, and clearing, and settlement of the transaction between you as the card issuer, the merchant, and the acquiring bank.

How could BIN Sponsorship help my product?

If you're looking to introduce a card-based product to market, BIN sponsorship can be a game-changer.

• Faster time to market: A BIN sponsor helps release products to market faster by removing the need for you to obtain your own licence, which is a complex and time-consuming process. By partnering with a BIN sponsor, you can cut through the red tape of regulatory compliance, getting your product to market faster, with assistance in designing and implementing a solution that seamlessly aligns with your brand identity and commercial objectives.

• Reduced operational overheads: By providing regulatory compliance support, the sponsor helps you avoid costly legal and compliance issues. They also handle the technical integration of payment processing systems, reducing the need for you to invest in extensive in-house IT infrastructure. This offloading of responsibilities allows you to focus on your core business activities, such as product development and customer service, without the burden of managing these operational tasks.

• Facilitates international expansion: A BIN sponsor helps you navigate the complexities of entering new markets and ensures a smooth and successful expansion. A sponsor can link you to major payment networks such as Visa, Mastercard, and allow you to issue cards in all locations where the sponsor holds financial licences.

Tips when considering BIN sponsorship

BIN sponsorship presents scalable solutions to match your business's growth. Whether you're a fledgling startup with a new payment product on the horizon or an established enterprise looking to broaden your financial horizons, BIN sponsorship offers the adaptability and backing you need to reach your objectives. This scalability equips you to respond to market shifts and customer demands, setting you up for enduring success in the competitive financial services realm.

The most notable benefit of BIN sponsorship is the streamlined card issuance process for financial products. This allows you to concentrate on your core services, with the technical and regulatory aspects of card issuance managed by the sponsor.

Another critical aspect of BIN sponsorship is the adherence to global financial regulations and standards. By using a respected BIN sponsor, you can confidently navigate the intricate web of financial regulations. This compliance builds customer trust and helps avoid the legal entanglements that non-compliance can bring.

If you have your sights set on international expansion, BIN sponsorship is a strategic advantage. It furnishes the infrastructure and backing needed to enter and operate in new territories, simplifying the launch of financial products. This can dramatically slash the time and resources required for market entry.

Using Airwallex as your BIN sponsor

Partnering with BIN sponsors such as Airwallex is key to your business’s success in entering new international markets. We provide the infrastructure and support you need to issue cards in over 40 markets. One of the most compelling reasons to work with Airwallex is our dedication to compliance. The regulatory environment can be complex and difficult to navigate, especially if you’re new to card issuing. Airwallex takes care of the heavy lifting to ensure all regulatory requirements are met, saving you time and resources.

Frequently Asked Questions

What is the difference between a BIN and IIN?

BIN (Bank Identification Number) and IIN (Issuer Identification Number) refer to the same thing – they both represent the first 6 to 8 digits of a payment card and identify the issuing institution (like a bank or card issuer). "IIN" is the more modern and accurate term, as not all issuers are banks. However, "BIN" is still more commonly used in the industry.

How much does BIN sponsorship typically cost?

BIN sponsorship costs can vary widely depending on several factors, including:

• Region (e.g. US, Europe, APAC)

• Type of card program (credit, debit, prepaid, virtual)

• Card network (Visa, Mastercard, etc.)

• Services provided by the sponsor (e.g., compliance, fraud monitoring, program management, KYC/AML management, and additional products offered alongside BIN sponsorship)

Cost often include initial setup fees, annual or subscription fees, fees per card issued, and transaction fees.

What are the key factors to consider when choosing a BIN sponsor?

One of the most critical aspects to consider when choosing a BIN sponsor is the global network coverage of the sponsor. A strong global network ensures that your transactions are processed smoothly and efficiently, even in international markets. This is particularly important if your business operates across multiple countries or plans to expand globally. Other considerations include regulatory and compliance capabilities, security features, financial infrastructure and integration capabilities, and the reputation of the provider.

What are the regulatory requirements for BIN sponsorship?

The financial industry is heavily regulated, and BIN sponsors play a critical role in ensuring that all transactions are secure and compliant with international standards. One of the primary regulations that BIN sponsors must adhere to is the Payment Card Industry Data Security Standard (PCI DSS). This standard is designed to ensure that all organisations that process, store, or transmit credit card information maintain a secure environment.

In the United States, the Federal Trade Commission (FTC) is a leading regulatory authority that oversees the activities of BIN sponsors. BIN sponsors must align their practices with FTC guidelines to avoid penalties and maintain the trust of their customers.

The European Union has also put in place strict rules to bolster the security of electronic payments. BIN sponsors within the EU are obligated to implement strong customer authentication SCA protocols and ensure their systems are continuously monitored for Payment Services Directive 2 (PSD2) compliance.

Beyond these specific regulations, BIN sponsors are often subject to routine audits to maintain compliance with international standards. These audits, performed by independent third-party organisations, scrutinise areas such as data security, operational processes, and risk management.

How can BIN sponsorship help my business expand into new international markets?

BIN sponsorship can significantly accelerate your business’s expansion into international markets by allowing you to issue local payment cards and financial products without needing your own banking or e-money licence. Using a sponsor’s regulatory coverage, you can quickly launch in new regions while ensuring compliance with local KYC, AML, and data protection requirements. BIN sponsors also enable you to issue cards in local currencies, reducing FX friction and improving the user experience for your customers. For platforms, marketplaces, and SaaS businesses, this allows you to embed localised financial services – such as employee cards, digital wallets, and payouts – into your offering, creating stickier customer experiences and new revenue streams.

Disclaimer: This information doesn’t take into account your objectives, financial situation, or needs. If you are a customer of Airwallex Pty Ltd (AFSL No. 487221) read the Product Disclosure Statement (PDS) for the Direct Services available here.