Cards & Credit

BIN Sponsor Partner: What is it, and how does it enable new players in the means of payment industry?

Published on Jan 09 2023. 12 minutes reading

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It's impossible to think about financial solutions without considering credit cards, products that are among consumers' favorites when making payments in physical or online retail. But how can you make the most of the opportunities in the card market? Fintechs and companies wishing to enter this sector can count on a BIN Sponsor Partner. In this article, we explain what BIN Sponsorship is and how your business can accelerate the development of card-related services. Check it out!

The advancement of instant payments Digital technologies are transforming consumer behavior in Latin America, without diminishing the importance of cards in this ecosystem.

According to one Mastercard surveyNine out of ten consumers in Latin America and the Caribbean already use digital payments, while 60% say they use debit cards for everyday transactions., ahead of digital wallets (42%) and transfers (39%).

The study also shows that 87% of respondents would like more establishments to accept digital payments.This highlights that there is still room to expand the infrastructure for accepting and offering financial solutions in the region.

In this case, banksFintechs and companies from different segments that wish to launch or expand card programs will find in BIN Sponsorship One way to accelerate your entry into this market is by reducing the operational and regulatory complexity of issuing credits. Understand how this model works throughout this article.

What is BIN Sponsor?

BIN is an abbreviation for Bank Identification Number, A numerical sequence on the card that identifies the issuing institution. Each BIN is registered with the card networks and is linked to an authorized issuer.

That's exactly where the BIN Sponsor. It is a institution authorized to issue cards and that has a link with the networks of flags, such as Visa and Mastercard.

This institution provides the necessary technological, operational and regulatory infrastructure. to enable card programs without having to independently establish the entire relationship structure with the card networks and the infrastructure necessary for issuing cards.

In other words, this allows fintechs, digital banks, retailers, marketplaces, and companies from different segments to offer credit, debit, or prepaid cards to their customers with a A more agile go-to-market strategy, reducing the complexity of the implementation process and accelerating the solution's entry into the market.

What is the difference between BIN Sponsor and BIN Sponsorship?

Although they are often used synonymously, the terms have different meanings.

BIN Sponsor It is the institution authorized by the card networks to issue cards and make its infrastructure available to other companies.

Yes, BIN Sponsorship It is a partnership model that allows fintechs, banks, and companies to launch card programs using this infrastructure, without needing to establish a direct relationship with the card networks.

In some cases, the term is also used. BIN Sponsor Partner to refer to the company that offers this service. In practice, the expression highlights the consultative and operational role of the partner during the implementation of the BIN Sponsorship solution.

understand the difference

BIN Sponsor	→	BIN Sponsorship	→	BIN Sponsor Partner
Who is it		What is		It can also be called
An institution authorized by the card networks to issue cards and provide its infrastructure.		A partnership model that allows companies to use this infrastructure to launch card programs.		A term used by some companies to highlight their role as partners in the implementation and operation of the BIN Sponsorship solution.

How does a BIN Sponsorship contribute to growing businesses?

So a BIN Sponsor is simply a means to drive businesses by providing card-related services, even if they’re companies taking their first steps in it or servicing a market showing lower potential (such as niche fintechs).

Learn about the main benefits in relying on a BIN Sponsor Partner:

Agile time-to-market

Structuring your own card issuing operation involves several technical, operational, and card network relationship steps. With a BIN Sponsor, Much of this infrastructure is already in place., reducing implementation time and costs.

Expert experience

BIN Sponsors like a Dock These are companies with extensive experience in the card market, in relationships with card networks, and in the development of white-label payment platforms, allowing your business to scale based on this already established expertise.

Customization

Having a BIN Sponsor partner does not affect the branding of the services to be launched. The cards can be totalmente customized, reflecting the visual identity, the propostThe company's value proposition and strategy.

Lower operational complexity

The partner assists in activities such as integration with card networks, processing, regulatory compliance, risk monitoring, and operational management, allowing the company to focus its efforts on customer experience and product improvement.

Scalability

As the business grows, the program can evolve by incorporating new products, features, and financial services without the need to replace the entire infrastructure.

Strategic decision: How to choose a BIN Sponsor to support your operation?

Understanding the advantages of having a BIN Sponsor Partner to launch a card payment operation, it is essential that this The partner should be chosen based on certain qualifying factors. To support your operation from the initial steps to consolidation. Here are some recommendations:

Technology and compatibility

Investigate whether the platform offered by the partner is... compatible with your products It is capable of providing the services your business wants to offer in the future, and it has an ecosystem of partnerships to add relevant solutions.

Possibility of growth

Another important factor to investigate is whether the BIN Sponsor has... capacity to keep pace with the growth of the operation, offering credit solutions These partnerships become increasingly robust as the business grows. This way, it's possible to avoid the need to change partners during a strategic expansion phase.

specialized knowledge

It is important to assess whether the BIN Sponsor has experience in the company's field of activity and understands the specific demands of that market. This familiarity contributes to the development of solutions that better meet business needs and can make a difference throughout the evolution of the infrastructure. Licenses and Permits

Before finalizing a BIN Sponsorship partnership, it's worth checking if your sponsor has all the necessary qualifications. licenses, authorizations and necessary relationships with the brands and other participants in the ecosystem.

What is the role of funding in a card operation?

In a card transaction, funding It is the financial structure responsible for providing the necessary resources to enable transactions and, in the case of credit cards, granting credit limits to customers.

In other words, it is the capital that sustains the operation and allows purchases to be financed until the bill is paid.

A definition of the funding model It influences aspects such as credit risk management, equity capital requirements, the division of responsibilities among partners, and the profitability potential of the card program. Therefore, this is a strategic decision for companies that wish to launch or expand their operations.

Internal funding vs. Third-party funding: how does it work in a card operation?

Based on an understanding of what a BIN Sponsor and a BIN Sponsor Partner are, it's also important to know the two funding strategies that exist in the ecosystem. cards currently.

The funding model is independent of the BIN Sponsorship. In a card operation, the BIN Sponsor may provide the issuing infrastructure, while the funding, that is, the capital used to finance the credit operationThis can be done by the company itself or by a partner institution, depending on the structure adopted.

Self-funding

In this model, the bank, the fintech or the company that offers cards to its customers chooses to to finance its own operation, using its own capital to support the loan portfolio and grant credit limits to users.

In this model, the institution assumes the capital needs to meet the cash flow demands of the operation and, depending on the structure adopted, also the risks and financial results associated with the card program. The remuneration for the operation will depend on the contractual model and funding structure chosen.

When is self-funding worthwhile? This model is often adopted by institutions that have greater financial and operational capacity to support a credit portfolio and that want more autonomy over the management of the operation. Depending on the business strategy, it can be combined with either an in-house issuance structure or a BIN Sponsorship model.

Third-party funding

in the model of third-party funding, A partner institution provides the necessary capital to make the credit operation viable. In this way, the company can launch its card program without having to allocate its own resources to finance the portfolio from the start.

Among the main characteristics of this model are:

The capital used to finance operations is provided by a partner institution;
Responsibilities related to credit risk, compensation, and financial management are defined contractually between the parties;
The company remains responsible for the commercial strategy, customer relations, and product offering.

BIN Sponsor and our Credit Card as a Service at Dock

Launching a card program requires much more than access to a BIN (Business Identification Number). It needs an infrastructure capable of supporting the entire operational journey, from issuance to processing. processamento of transactions, including compliance, security and scalability.

With the solution Cards & Credit, Dock It brings together in a single platform the resources needed for banks, fintechs, and companies to launch and expand their card programs with greater agility and flexibility.

Among the main differentiating factors of the solution are:

BIN Sponsorship and Flag Licenses, simplifying market entry;
Card issuance and processing credit, debit, prepaid and private-label;
Physical and virtual cards, with support for the main flags;
Integration with digital wallets and tokenization, providing a more modern and secure payment experience;
Financial APIs scalable, which allow you to customize products and accelerate integrations;
Safety, prevention of fraudes and regulatory support, reducing operational complexity.

With over two decades of market experience and one of the largest card processing platforms in Latin America, the Dock It provides the necessary infrastructure for institutions and companies from diverse sectors to focus their efforts on innovation and customer experience, while accelerating the launch and evolution of their card operations.

Looking to launch or expand a card program with greater speed and security? Discover our solution. Cards & Credit da Dock Discover how a complete infrastructure can accelerate your strategy and drive the evolution of your business.