A BIN list can be downloaded in Excel format to use as a database, or can be queried directly using an API. How does this work?
The BIN database, also commonly known as the Bank Identification Number database, is used for card verification. Any credit or debit card that is issued by a bank will have your 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 it is determined to be correct, the transaction will be approved. If found to be incorrect, the transaction will be instantly rejected.
As you can see, the database can be a very useful tool if you are handling online transactions. What happens if the card I’m using is stolen? Without a BIN list, you’ll never know, until the bank notifies you of a refund.
A chargeback occurs when the legitimate owner of the card files a dispute with the bank. He or she may claim that the transaction is unauthorized (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 chargeback and the funds are returned to the card owner. The retailer will have to bear the chargeback fees. What happens to merchandise that has already been shipped to the customer? Responsibility for retrieval rests with the retailer. As you can imagine, this task is full of difficulties. It’s a route most business owners would prefer to avoid. Sometimes goods can cost up to thousands of dollars per transaction and the experience can be extremely painful.
To avoid these 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 problem integrating the database with the back end of an e-commerce website.
But some business owners just don’t want the hassle of regularly updating the database. For these business owners, they have another option. They can now send queries directly to the database through 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 service providers. To use the database, simply send a request through the API and the service provider will return a response in XML format. It might seem a bit technical at this point, but it’s actually an easier solution to implement compared to a database.