What's in Card Number
In last article, we discussed about what are card networks. In this article, we shall discuss about how the POS machine (card swipe machine) knows to which network does the card belong to.
POS machine need not know to which network the card belongs to. It just passes the card info to the acquirer. Based on the card number, the acquirer will understand to which card network the card belongs to.
What exactly is there in card number? Let’s find out.
Most debit card or credit card have 16-digit number.
The first few digits of the card number signifies the card network that it belongs to. For Visa cards, the card number starts with “4”.
For MasterCard, it is “51” to “55” and “2221-2720”.
For Rupay it is “60”, “65” etc.
So, based on the card number, acquirer will send the transaction request to relevant network.
Let’s say you have a card issued by Axis Bank with card number 4183 5472 1680 3009 and you swiped the card in Big Bazaar.
Since the card number is starting with “4”, the request will be sent to Visa.
Now, how will Visa know which bank issued this card number ? Here comes the role of Bank Identification Number (BIN) or Issuer Identification Number (IIN).
The first 6-digits of the card specifies the BIN for the card.
In this card number, “418354” is the BIN.
What exactly is this BIN ?
As the name specifies it is used to identify the Bank/Issuer who issued this card.
How exactly does this work ?
Any bank who wants to issue cards will approach a card network and the card network issues a BIN to the bank.
In this case, Visa assigned the BIN - 418354 to Axis Bank and Axis Bank created 16-digit card number using that BIN and gave the card to you. The 16-digit card number will be generated by Axis Bank using Luhn algorithm. We shall talk about it some other day.
So, when Visa got the transaction request with card starting with 418354, it knew that this BIN was assigned to Axis Bank. So, Visa sends the request to Axis Bank.
Axis Bank reviews the transaction request for different parameters like validity of the card, balance in the account etc. and approves the transaction and sends the response back to Visa.
Visa responds back to Acquirer. Acquirer responds with success response to the POS machine and POS machine displays that the transaction is successful and the Big Bazaar delivers the goods to you.
And the beauty of this is that all this happens in less than 10 sec.
You may say - This is great. So, how will the merchant get his money?
Sure, I will talk about that in my next article !! See you soon
I would love your feedback. You may reach out to me on hemanth.finshare@gmail.com or on Twitter
PS: Traditionally, length of the BIN is 6-digits and these BIN numbers seems to be getting exhausted. So, recently Visa started issuing 8-digit BINs
Disclaimer
The author is not affiliated with any banks, products, networks, companies mentioned in this article. This blog is only for educational purposes. All the logos mentioned in this post are owned by respective companies.