How to Avert Credit Card Fraud With A BIN Checker

If you do not know what a BIN checker is, here is a quick primer. BIN stands for Bank Identification Numbers. These numbers are collected and put in a database and the database is commonly known as the BIN database.

The database is used by both offline and online retailers to verify card transactions. These cards can be credit cards, debit cards, or even gift cards. The database contains information about the cards, which includes the issuer, the card type, the card number and more. When a transaction takes place, the retailer immediately do a check with the database. If it’s a valid card, the transaction is approved. If the card fails validation, the transaction is rejected instantly so no real damage is done. Now why is it important for a retailer to verify cards in real time?

Imagine that a “customer” tries to make a purchase with a stolen card and bought hundreds of dollars worth of products. Without any sort of verification tools in place, the business approved the transaction and the sale was completed. Then the real owner of the card discovered that his card was missing (i.e. stolen). So he made a police report and immediately issued a charge back with the bank.

In this case, the bank will process the charge back based on unauthorized transaction. The money would be returned to the owner of the card. Note that the business had already delivered the products as the sale was completed. The business suffered hundred of dollars immediately as it’s unlikely that the products will be recovered. The business also has to pay for charge back fees. Such business costs are normally just passed on the consumers – the real paying customers.

Sounds unfair? Feel like doing something about it? What if there is something that CAN be done?

The solution is to use a BIN database. This is a tool that helps to verify transactions before there is any real harm done. When a card is rejected, there are no charge back fees. The business also does not risk losing valuable goods.

How to verify card transactions with a BIN database?

The solution is simple. Simply invest in a good database. The key is to get a database with highly accurate records. That means the supplier should update the records on a regular basis. Since new cards are issued and scrapped every day, databases should ideally be updated daily.

Your system must also be integrated with the database so that when a card is used, a check is performed instantly. Therefore, the database should come in a format that can be easily hooked up with your current system.

When the database has been successfully integrated, you will start to enjoy the benefits of having a BIN checker. Business costs associated with card fraud and thefts will be minimized and profits will be substantially higher in the books.

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