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It’s a bum BIN deal

Not owning your debit card Bank Identification Number can cost you…a lot

It’s a bum BIN deal

Okay—the first thing you should do after you read this blog is check if your institution owns your debit card Bank Identification Number (BIN) and the PIN keys that go with it. If you decide to make a change of debit card processors for whatever reason and you do not own them, it is going to not only be disruptive to your customers, but very costly to your organization! Why?

If you don’t own your debit card BIN because it is shared with other financial institutions in a pool, then you will not be able to take your number with you when you decide to change processors. That means you will be forced to re-issue all of your debit cards. Of course, re-issuing debit cards is becoming a frequent occurrence due to data breaches, but if you don’t have to, why should you?

Debit cards represent a huge income generating opportunity for your organization. New card security features such as the EMV chip and tokenization are coming and soon your institution will be spending thousands of dollars on the cost of reissuing cards you do not own, but are only renting. What kind of a deal is that?  It gets worse. De-conversion costs to leave a processor can be hefty. Not owning your BINs can not only complicate matters by forcing your customer to change all of their automated payments by re-enrolling their cards, but at the same time will significantly increase your cost to leave your card processing vendor.

So what do you do?

As stated above, find out from your current card processor if you own your BIN numbers. If you do not own them, develop a strategy to join your card brand (VISA or MasterCard) as an affiliate or associate member (these are for smaller institutions). Then buy your BINs from the card brand you are a member of, and arrange with your vendor to start issuing your existing cards as they expire using your new BINs that you own. There are a few other details that you will need to know. First, your vendor may resist your move to take control of your cards, but just be firm and git-r-dun! Second, reach out to an experienced consultant that can assist you through the process of getting YOUR cards BACK! Yes, I can do that for you, but so can others.

To put things into perspective… The front-end cost of taking control of your cards is not going to be nearly as much as the back-end costs for not!

The Wombat!

Dan Fisher

Dan Fisher is president and CEO of The Copper River Group, a consulting firm headquartered in Fargo, N. D., that focuses on technology and payment systems research and consulting for community financial institutions. For nearly 30 years, Fisher has worked in the financial industry using technology to improve the bottom line. He was CIO of Community First Bankshares (now part of Bank of the West), has served as a director of the Federal Reserve Board of Minneapolis, the chairman of the American Bankers Association Payment Systems Committee, and was a member of the Independent Community Bankers of America Payments Committee. Fisher has written numerous articles on banking technology and the payments system. He has authored or co-authored six books and recently published a book titled, "Capturing Your Customer! The New Technology of Remote Deposit." You can contact Fisher at [email protected] or at 701-293-6222.
P.S. To understand Dan's nickname, check out "About the Wombat" on his website.       

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