ABA Formalizes BIN Administration Handoff to Long-Term Partner CUSIP

CUSIP Global Services announced late Wednesday that it will be taking over day-to-day operations of the administration of the issuer identification number system from the American Bankers Association. The change is not monumental as CUSIP has a long history of managing numbering programs for the financial services industry. The ABA will maintain overall registration authority for the IIN standard, which was developed in the early 1970s.

The administrative handoff is part of a larger strategy to modernize the technology behind the IIN standard and is not expected to have any impact on how card issuers manage their programs, CUSIP says. A BIN is an 8-digit number used to uniquely identify card-issuing institutions, such as credit, debit and points/rewards card issuers.

CUSIP assumed all day-to-day administrative tasks for the standard, including customer service, new applications, identifier issuance, billing and payments, and data maintenance for the IIN program on Sept. 1, a spokesperson says.

“We have the technical expertise and operational capacity to ensure that the IIN standard is maintained with that same level of consistency and innovation,” Scott Preiss, senior vice president and global head of CUSIP says by email. “As the number of card issuers and digital transactions continues to proliferate, it is critical that the IIN system be run as efficiently as possible and that it continues to keep pace with the growth of the marketplace. [CUSIP] is ideally suited to manage that process.”

Giving CUSIP administration of the IIN standard is also expected to benefit the ABA by freeing it up to focus on what it does best, which is advocate for pro-growth policies for banks in the United States, provide banks guidance on regulatory changes, and help banks keep pace with changing technology standards, according to Cliff Gray, a senior analyst for Omaha, Neb.-based payments consultancy TSG.

The change in day-to-day management of the IIN will not impact how card issuers manage their programs. “The transition will be completely imperceptible to issuers,” Preiss says. “Other than receiving support emails and updates from the [CUSIP] team, the user experience will not change.”

Technological upgrades to the IIN platform will improve operating efficiencies, fulfillment, and the account management process to ensure the system runs as efficiently as possible into the future, CUSIP says.

 “This transition is all about building a more efficient operational backbone for the IIN system so that the standard continues to meet the needs of card issuing entities as that market grows and evolves,” says Preiss. “There will be no changes in cost structure or application process.”

A smooth transition in day-to-day management of IINs is critical, as any significant changes to how IINs are managed would result in a major disruption to the payments industry, according to Gray.

“The process around managing IINs is highly fixed in nature and has not changed in decades. If it were to change, you’d blow up three quarters of the payments system,” Gray says. “Some of the underlying technology behind IINs will change, but that’s overdue and [CUSIP] has the IT architecture to do it.”