Want to Learn about BIN and IFSC Code?
- 17 May 2017 | 935 Views | By Mint2Save
This article is all about BIN (Bank Identification Number) & IFSC (Indian Financial System Code)
A bank identification number (BIN) is the number that helps to protect both merchants and consumers in the online marketplace as whenever they use a credit or debit card it contains BIN. Typically, BIN comprises four to six numbers mentioned on cards that are issued by the banks. This numbering also applies to charge gift cards, cards, debit cards, prepaid cards and other electronic benefit cards. The number on the card easily identify the type of card being used, the geographic area on the card issuer and by which company or bank card is issued.
Various roles performed by BIN are:
- It Helps to recognize the purchaser by giving an additional signal
- It makes sure compliance with export laws by recognizing the country where the card is issued.
- It ensures checkout process smoother and avoids errors by the high level of security.
- By asking the customer to enter their credit card number and the type of credit card they are using confirms inline validation
- It helps to protect monthly payment programs too.
- It saves time by confirming whether or not a credit card is accepted by a particular online merchant before sending for authorization.
How does BIN work?
BIN is also known as IIN or issuer Identification number because not all the cards are issued by the banks. Like for an example, when you buy anything with your card, you enter all details on the payment page. After submitting the six digit number on the card, then the merchant and payment processor detect or identify:
- What kind of credit card it is (debit or credit).
- Credit card bank (whether a MasterCard, Discover, Visa card or any other)
- Credit card level (platinum or corporate or premium etc.)
- Location where the credit card was issued.
- The bank’s phone number
The BIN speedily assists a merchant to identify from which bank the money is being transferred, phone number and the address of the bank. BIN is the most traditional method used by the online vendors by the means to detect the fraud, if any.
BIN Authorization process:
The authorization can be explained easily with the help of example, such as a customer standing at a petrol pump and swipes her bank card and when she swipes the card, then at the same time the system scans the BIN to identify the specific issuing institution that withdraws the funds. Then an authorization request is sent to the customer’s account and a request is authorized within a few seconds and it tells whether the transaction is approved/denied. The processing system of credit card would not be capable of determining the source of the customer’s funds and would be unable to complete the transaction without a BIN.
After understanding BIN, let’s explore one of the smartest systems that is empowering almost all sorts of electronic transactions. From loan repayments, to government subsidies, this system is virtually known as the cheque killer. It has reduced the transaction time by huge levels and eased out the process to a few minutes.
Let’s explore the IFSC codes.
Indian Financial System Code (IFSC)
Indian Financial System Code is an eleven character code used to identify every branch of bank uniquely which is participating in the NEFT system in India. IFSC is assigned by Reserve bank of India. IFSC is the unique identification code of every Bank similar as we use unique roll numbers in schools. Out of 11 characters first 4 alphabet characters represent the Bank name.
|Bank Code||0 (Zero)||Branch Code|
The next character is 0 which is reserved for future use and the last six characters represent the branch code. Bank branches all over the country have unique IFSC codes.
Where will you find IFSC code?
The code is a 11 digit code which is printed on cheque book for NEFT enabled banks. IFS Code is used for electronic payment such as Real Time Gross Settlement (RTGS), National Electronic Funds Transfer (NEFT), an interbank electronic instant mobile money transfer service (IMPS), Centralized Funds Management System (CFMS) and Immediate Payment Service to send the messages to the destination banks/branches. Also, you can get the bank IFSC code, bank details, branch address for all banks in India from various sources:
- IFSC code website:
- Select your Bank (for example: Bank of India)
- Select your State
- Select your District
- Select your Branch name – Now you can find IFSC Code, MICR Code, Address and Contact phone number of your bank branch.
- Bank A/c Statement
- Bank’s website
- Reserve Bank of India website.
The IFSC code system is only used for domestic transactions, thus every bank branch in the country, irrespective of whether they are the private sector, public sector or even foreign banks will have an IFSC Code that performs as a unique detector for the bank branch.
When it comes to electronic transfers, identification codes like BIN and IFSC are no less than GPS locating banks and financial institutions. There are over a trillion transactions taking place all over the world.
The Indian economy is based aggressively on the primary sector and most of the dealings here are over the counter. These are realized only when the payment is realized, and only then the services are rendered or goods are sold. With quick transaction mechanisms like IMPS, RTGS and NEFT, a strong push has been given to the economy.
Further, the operating costs of these IFSC based systems are also very low and tend to balance out the work of bank staff. NEFT, RTGS and IMPS do not require any signature and the process can even be carried out at one’s home, via a simple mobile app.
With the servers being Bank dedicated, there are lesser chances of the whole banking network going down due to hacking or any unpleasant event.
Just as they say: With great power comes great responsibility. Using BIN and IFSC calls for a more responsive and precise data feeding as a single mistake in data entry can cost a lot of time and money, and at times, even money cannot be recovered back.