What is BIN Sponsorship and how does it accelerate card launches?

Payment methods continue to evolve, and definitely, the alternatives that arrived hand in hand with technology have already been consolidated. Indeed, the strength of electronic payments and the adoption of these products create more and more opportunities for users to have solutions that were perhaps previously unattainable for everyone. But not only that, now any company can offer financial solutions, developing them from scratch or easily integrating them into their business through embedded finance to quickly offer products like digital accounts or various types of cards.

Typically, starting a solution from scratch, including licenses, government regulations, and waiting times... can take time. And as always, there are ways to achieve greater speed and lower costs to launch a fintech into the market. Having a technology partner that already has a prefabricated solution is one of them. And when it comes to launching cards (debit, credit, or prepaid), there's one more point that cannot be overlooked: BIN Sponsorship. Without access to the BIN, the possibility of transacting on the most massive card networks is practically nil. And obtaining this specific license can further delay the launch.

Cards are one of the elements that first come to mind when thinking of financial solutions. They are a classic choice for consumers for physical and online transactions and, in the case of credit cards, to split payments or make purchases for more money than they have available. Proof of this is the current situation in Mexico, where 2022 closed with a record value of 30 million credit cards across the country, according to the National Banking and Securities Commission (CNBV).

However, talking about offering cards without considering BIN Sponsorship is getting a little ahead of ourselves. In this article, learn what BIN Sponsorship is, how it can help a financial service evolve quickly, and how it is used to make the most of the card boom in the market. Let's go!

First, the simplest: What is a BIN?

In the world of finance, this abbreviation stands for Bank Identification Number and refers to the first six or eight numbers of a card. And what do those numbers represent? The institution or brand responsible for its issuance, such as Visa or Mastercard. Having this number is necessary to offer your users valid cards, but obtaining it is not always an easy task, especially for a business that is just starting in the Fintech world.

What is the BIN used for in cards?

Initially, as its name suggests, it is an identification number. Therefore, in addition to identifying which brand issued those cards, it allows:

• For the entire scheme involved in card transactions to identify where to settle the funds of each transaction.
• For any cardholder or store personnel to know who issued the card selected to make a payment.
• That it is possible to identify the holder of a purchase from any acquirer or institution in the card network, in various scenarios such as: lack of receipts, system failures, or possible fraud.

Now that you know how to identify the BIN on cards, here's a bonus track explaining the meaning of the remaining digits on the card:

Now then, what is BIN Sponsorship?

Once the business has obtained its BIN, the brand or issuing entity responsible for your business's cards becomes its BIN sponsor. This will provide the opportunity to offer its cards and generate a business around it. And, as we mentioned earlier, obtaining sponsorship directly from major brands or franchises, such as Visa or Mastercard, is not usually an easy task for those starting in the fintech world. Fortunately, there are other ways to achieve this.

There are companies that already have ties with the main brands and can provide BIN Sponsorship to any business looking to launch financial services quickly and economically.

What benefits does possessing a BIN Sponsorship offer?

Forming an alliance with companies that already have relationships with the main brands or card issuers can be the ideal solution for those who need to launch cards. Let's see all the benefits this means for businesses:

• Fast time-to-market: The regulatory process for issuing cards is extensive if started from scratch… and business ideas sometimes cannot wait. For situations where a company seeks to quickly enter the market with their cards, this is a win-win.
• Cost-effective: These types of partnerships tend to have lower costs because they simplify operational expenses and the number of resources dedicated to securing BIN sponsorship. Moreover, this approach avoids registration fees and the bureaucratic processes involved in applying directly to the brands or franchises.
• Strategic partnership: Generally, companies that provide BIN Sponsorship have extensive experience in the fintech market and in building relationships with brands. This can facilitate more tools, licenses, or products to strengthen business ideas and scale them. For example, at Pomelo we provide an end-to-end solution for the rapid launch of credit, debit, and prepaid cards to the market.
• Brand autonomy: The fact that you use BIN sponsorship through a company does not mean that your business will lose independence in terms of its identity. Your cards can feature your design and carry the BIN of the corresponding brand, not to mention the partnership that established the connection.

Ok, and how to choose the best partner for BIN Sponsorship?

Sometimes the offer is very extensive. But beyond the costs or speed, it is sometimes necessary to consider other very important aspects:

• Scalability: The future seems distant, but there are decisions that must be made today to achieve a business that can later scale regionally. There are solutions not connected to the regulations of other countries or that only offer the BIN of local issuers. Therefore, you will have to start from scratch if you decide to expand your business to more Latin American countries.
• Technology: It is essential to find a partner who is a specialist in the desired technological infrastructure, because, in addition to offering BIN Sponsorship, they can advise you and provide more products to enhance your business idea, making it more attractive and offering a better experience for your users.

Now that you know everything about BIN Sponsorship and all that must be considered when securing it... You are ready to enter the credit card business!