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Chapter 3 : A bit more Technical

Understanding BINs and Card Scheme Routing (UK Guide)

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IN THIS LESSON

When a customer pays by card, most When you accept card payments, there’s a lot going on behind the scenes — including how the transaction is routed, and which card network handles it.

Two important technical concepts in this process are BINs and card scheme routing.

In this article, we break down what a BIN (Bank Identification Number) is, how scheme routing works, and why it matters to your business when it comes to fees, speed, and customer experience.

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  • BIN stands for Bank Identification Number — it's the first 6 to 8 digits of a card number, and it tells the payment network:

    • What card scheme it belongs to (Visa, Mastercard, Amex, etc.)

    • Which bank issued the card

    • What type of card it is (e.g. debit, credit, commercial, prepaid)

    • Which country the card is from

    📌 Example:
    Card number: 4539 1234 5678 9012
    BIN: 4539 12 – This might indicate a UK-issued Visa debit card from Barclays

    The BIN is the key to determining how the transaction is processed, who handles it, and how much it will cost you as the merchant.

  • Scheme routing refers to the process of selecting which card network handles the transaction when a card is presented for payment.

    In the UK, the most common card schemes are:

    • Visa

    • Mastercard

    • American Express

    • (Others include UnionPay, Discover, Diners Club, JCB)

    For dual-branded cards (less common in the UK but growing globally), scheme routing becomes a choice. For example, a card might support both Visa and Mastercard, and the terminal decides which network to use.

  • These behind-the-scenes details directly affect:

    • 🧾 Transaction fees

    • 🕒 Settlement speed

    • 🔐 Security and compliance rules

    • 🌍 Cross-border surcharges

    • 📊 Reporting and reconciliation

  • Every BIN carries associated interchange and scheme fees, which vary depending on:

    • The card type: debit, credit, corporate, reward card

    • The issuing country: UK, EU, or non-EEA

    • The cardholder's bank

    • Whether the transaction is in-person or online

    💷 Example:

    Card Type - Interchange Fee (Typical) - Notes

    UK Visa Debit (Consumer) - 0.2% - Regulated cap in the UK/EUUK

    Mastercard Credit (Consumer) - 0.3% - Regulated cap in the UK/EU

    Business/Corporate Cards - 1.5% – 2.5% - No regulation cap; varies by BIN

    Non-UK/EEA Issued Cards - 1.5% – 2.0% - Often higher costs for merchants

    💡 Your terminal uses the BIN to determine these charges automatically. But some providers add extra margins on top — so knowing how this works helps you spot unfair fees.

    • Assuming all debit cards have the same fees — they don’t!

    • Not knowing when you're paying more for business cards

    • Accepting a blended rate without knowing the underlying BIN costs

    • Thinking Amex works like Visa/Mastercard (it doesn’t — Amex operates differently)

Benefits of Understanding BINs and Routing

  • Spot hidden charges linked to specific card types

  • Avoid overpaying on corporate or non-UK cards

  • Choose providers that support BIN-level data tracking

  • Improve reconciliation with clearer reporting

  • Prepare for the future of Least-Cost Routing in the UK

Final Thoughts

BINs and routing may seem like back-end payment tech, but they have a real impact on your fees, your reporting, and your profitability.

By understanding what a BIN is — and how your terminal or provider uses it — you’ll be better positioned to:

  • Choose the right pricing model

  • Avoid unnecessary fees

  • Negotiate better terms with confidence

🔍 Compare now or speak to an expert – no pressure, no jargon, just practical advice.