A BIN list can be downloaded in Excel format to be used as a database, or it can be queried directly using an API. How does this work?
The BIN database, also commonly known as the Bank Identification Numbers database, is used for card verification. Any credit or debit card that is issued by a bank will have its information captured in the database. The database is then used as a tool for verification purposes. That is, the card being used will be checked against the information in the database. If found to be correct, the transaction will be approved. If found to be wrong, the transaction will be rejected instantly.
As you can see, the database can be a very useful tool if you are handling online transactions. What happens if the card that is being used happens to be stolen? Without a BIN list, you will never know – until the bank notifies you of a charge back.
A charge back happens when the legitimate card owner files a dispute with the bank. He or she can claim that the transaction is not authorized (as is the case when a card has been stolen), and that the transaction is fraudulent. The bank is likely to side with the consumer. When that happens, the bank issues a charge back and the funds are returned to the card owner. The retailer will have to bear the charge back fees. What happens to the merchandise that has already been sent out to the customer? The onus is on the retailer to get it back. As you can imagine, this task is fraught with difficulties. It’s a route that most business owners would rather avoid. Sometimes, goods can cost up to thousands of dollars per transaction, and the experience can be extremely painful.
To avoid such cases, a BIN database can be downloaded and used to prevent card fraud. Traditionally, the database is only available in Excel format. This is a common database format and most developers would have no problems integrating the database with the back end of an ecommerce website.
But some business owners just don’t want the hassle of having to upgrade the database on a regular basis. For these business owners, they have another option. They can now send queries directly to the database via an online API.
The API is a great solution because business owners don’t have to deal with the database directly. All updates are handled by the service providers. To use the database, simply send a request using the API and the service provider will return a response in XML format. It may sound a little technical at this point, but it’s actually an easier solution to implement when compared with a database.