How BIN Sponsorship Helps You Issue Cards Without a Bank License

Card products used to be the domain of big banks. Today, many fintechs launch their own branded cards without ever becoming full scheme members. Behind most of these programs is the same basic structure, usually described as bin sponsorship.

If you have ever typed what is bin sponsorship into a search bar and found only vague marketing pages, this guide is for you. We will unpack how the model works, who does what in a card program, what it costs, where the risks sit and when it actually makes sense to build on this approach.

BINs and Card Schemes: What Happens Behind the Numbers

A Bank Identification Number (BIN) is the string of digits at the start of a card number. It tells the payments world which bank and product are behind the plastic or virtual card. Card schemes use it to route authorisation and clearing messages.

In practice, a BIN encodes:

• The card network (Visa, Mastercard and others)
• Country or region of issuance
• Product type (debit, prepaid, credit)
• Segment (consumer, SME, corporate, travel, loyalty, etc.)

When a card is used, the scheme reads the BIN and sends the transaction to the right issuer. That issuer decides whether to approve, decline or challenge it. For a fintech, getting “its own BIN” directly from a scheme usually requires a licence, capital, risk teams and a long onboarding process.

The Essence of BIN Sponsorship: Roles and Responsibilities

Most young fintechs do not become direct scheme members. Instead, they plug into a licensed bank that already holds BINs and scheme memberships. This bank is often called the bin sponsor because it “lends” its issuing capacity to the fintech.

A typical chain looks like this:

• Sponsor bank – holds the licence, scheme memberships and BINs; formally issues the cards and owns regulatory responsibility.
• Card scheme – provides the network rails and rulebooks.
• Processor – runs the authorisation engine, card management, settlement files and APIs.
• Fintech / program manager – designs the product and UX, manages customers, and runs day-to-day operations under agreed rules.

In a bin sponsorship model, the fintech sits on top of the bank and processor stack. The bank talks to the scheme and regulators. The fintech focuses on product design, onboarding, support and growth, but must follow the risk and compliance framework agreed with the bank.

Comparing Card Launch Models: Direct, Sponsored and White-Label

Not every team needs the same level of control. Some care most about owning the product design, others about speed and minimal regulatory load. Broadly, there are three ways to launch cards.

Card launch models compared

Industry data from card networks and consultants shows that most early-stage fintechs start in the middle column. BIN sponsorship usually offers enough flexibility to build a differentiated product without the multi-year commitment of direct membership.

When a Business Really Needs a BIN Sponsor

Not every company issuing cards needs its own BIN structure. Sometimes a PSP’s “card widget” or a simple payout card from a processor is enough. But there are clear cases where working with a dedicated sponsor makes sense.

Typical scenarios:

• Neobanks and digital wallets that want full-featured primary spend cards with rich controls
• Marketplace and gig platforms that pay out to many users and want branded cards for workers or sellers
• Corporate and expense programs that need granular limits, MCC controls and reporting
• Loyalty and reward schemes that tie card usage to points, cashback or miles
• Vertical-specific solutions (travel, fleet, healthcare) where standard templates do not cover needed features

If your roadmap includes unique pricing, custom limits, multi-geo issuance or complex authorisation logic, a basic PSP integration may not be enough. In that case, a sponsorship agreement with a bank that understands your vertical is often the realistic next step.

Risks and Requirements: How Sponsorship Looks to Regulators and Schemes

From the outside, a card may look like a pure “fintech product”. Legally, schemes and regulators still see a bank behind it. That bank carries the licences, capital requirements, reporting duties and direct accountability when things go wrong.

Typically, the bank is responsible for:

• Being a regulated issuer under local and scheme rules
• Defining which card products and limits are acceptable
• Reporting to regulators and card schemes
• Managing overall fraud, credit and compliance risk at portfolio level

The fintech partner must, in turn:

• Run robust KYC/AML in line with the bank’s policies
• Monitor transactions and handle alerts and investigations
• Implement fraud controls and velocity checks
• Deal with chargebacks, disputes and customer complaints within scheme timelines

Regulators and schemes watch both sides. If the fintech onboards risky customers, ignores alerts or pushes non-compliant marketing, the sponsor bank ends up answering tough questions. This is why early conversations about risk appetite, target markets and product design are so important.

Economics of BIN Partnerships and Key Commercial Questions

Card programs are not just about logos on plastic. They are also about unit economics. A basic P&L includes interchange revenue, scheme and processing fees, chargeback losses, fraud, support and IT.

Key questions to clarify with a partner:

• How is interchange shared between fintech and bank?
• What fixed fees apply per BIN, per card, per authorisation?
• How are scheme assessment fees and network penalties passed through?
• Are there required reserves or collateral for risk coverage?

Some banks price access as a simple bin rental fee combined with per-transaction charges and revenue share. Others use tiered models that reward higher volumes or more profitable portfolios. High bin rental without realistic volume assumptions can destroy economics for early-stage projects, so modelling scenarios is essential. In some deals, bin rental is partly offset if the fintech brings deposits or other profitable flows.

Different products behave differently: mass-market consumer cards rely on scale and everyday spend; niche B2B programs can sustain higher fees if they remove friction in complex workflows. Understanding this early helps avoid unpleasant surprises after launch.

How to Choose a BIN Sponsor and Plan Your Launch

Choosing a sponsor is more than picking a brand name. The wrong fit can slow you down or block key features; the right one can become a long-term strategic partner.

Practical selection criteria:

• Geographies and schemes – where the bank can issue, and on which networks
• Supported use cases – consumer, SME, corporate, virtual-only, tokenised wallets, etc.
• Form factors and tech – plastic, virtual, tokenised, support for push provisioning, mature APIs and webhooks
• Risk appetite – comfort with your target segments, countries and business model
• Experience – proven launches with similar programs and transparent references

A simple launch roadmap usually includes:

1. Discovery and design
   Align on target users, features, markets and card types. Document responsibilities in detail.
2. Legal and commercial agreements
   Fix roles, revenue share, fees, risk ownership and conditions for scaling or exiting the partnership.
3. Technical integration and testing
   Integrate processor and sponsor APIs, run test cards, simulate declines, chargebacks and edge cases.
4. Pilot phase
   Launch with a small group of users, watch behaviour, tune limits and fraud rules, tighten support flows.
5. Scale-up
   Expand to broader segments and geos, refine reporting and analytics, and revisit commercials as volume grows.

If your product also needs strong cross-border capabilities and multi-currency payouts, you may combine issuing with separate providers for international transfers. Platforms like 2PayApp help businesses send and receive cross-border payments on competitive terms, while your card program runs on top of a suitable BIN arrangement.

BIN sponsorship is not a magic shortcut, but it is a practical way for fintechs to get from idea to live card program without becoming full banks or scheme members. It lets a young company focus on product and customer experience while relying on a regulated partner for licences and scheme access.

Used well, this structure balances speed, control and risk. Understanding who does what, how costs are built and who is responsible for which part of the stack makes it easier to decide whether a sponsored model, a simple white-label setup or full direct membership is right for you at this stage of your journey into card issuance.