Navigating the Labyrinth: A Deep Dive into the Modern Card Issuing Ecosystem and the Complexities of BIN Migration

By - J. Michael Bradley

# 1: This is the first of three articles in our “Deep Dive” part series on Card Issuing. Our “deep dive” formats look into particular subject matter and focus on topics we believe are important to our followers interested in bridging traditional Fintech and Web3.

As the web3 gods descend to meet the mere mortals of the existing Fintech ecosystem, a recurring theme emerges; how do we leverage the value of digital assets into the world of fiat currencies?  In our previous deep dive articles, we looked at the impact that stablecoins would have on the traditional Fintech ecosystem and our focus was mostly on B2B applications.

The same theme of “off ramping” stablecoins to fiat, applies to custodians of crypto assets (crypto wallets, crypto exchanges). Why? Digital asset holders (the customers of these crypto wallets and exchanges) need to “off ramp” from value in BTC, ETH etc to USD, SGD, euro, etc. More importantly it needs to be a seamless customer experience - so that account holders have access to their holdings in wallets and can use the value to purchase airline tickets, pay for groceries and all the other mundane worldly things mortals do. 

Transferring digital value to traditional payment cards (Visa, Mastercard, etc.) through a strategy of card issuing becomes the go to pathway for “off ramping” digital value for millions of digital asset holders. The existing payment and acceptance infrastructure is in place, vast and well established. But - and this is a big caveat - it is confusing and fraught with challenges. 

Entering  the Labyrinth

Like Theseus navigating the infamous Labyrinth, today’s emerging fintech actors contemplating a card issuing strategy  face a strange and often terrifying maze of solution providers, frameworks, cost structures and myriad considerations.

The rapid expansion of the FinTech sector is fundamentally changing how payment cards are issued. What was once the exclusive domain of large, vertically integrated banks has unbundled into a complex, multi-layered ecosystem, driving unprecedented innovation but introducing new areas of risk and complexity.

For any company—from a crypto exchange to an e-commerce giant—looking to embed finance into its customer journey, understanding this murky card issuing landscape is crucial. What follows is a “taxonomy”; a classification map of relevant stakeholders to help navigate this Labyrinth. It is intended for both established Fintech players as well as newly descended fintech “gods” .

I. The Unbundled Architecture: Defining the Card Issuing Taxonomy

The modern card issuing landscape is best understood as a four-party value chain, where distinct entities handle the legal, technical, and consumer-facing aspects of the card program. The last link in this four party system is the consumer - who ultimately uses the value transferred and stored in this card. The success of a card product hinges on the seamless, compliant interaction between these players.

Card Issuing Ecosystem Taxonomy

The relationship generally flows downward from regulation/licensing to technology, and finally to the customer-facing product:

Rank	Actor Category	Role	Key Function	Typical Entity Type
1	Card Networks	The Scheme and Regulator	Set global rules, own the payment rails, license BINs.	Visa, Mastercard
2	BIN Sponsor / Issuer	The Legal & Compliance Owner	Holds the BIN, the financial license, and regulatory liability.	Banks, EMIs (Electronic Money Institutions)
3	Processor / BaaS Provider	The Technology Core	Authorizes transactions (in real-time), manages card accounts/ledger, and connects the Sponsor to the Network.	Tech-focused FinTechs (e.g., Galileo, Marqeta)
4	Program Manager / Client	The Customer-Facing Product	Designs the user experience, owns branding, handles marketing, and customer support.	FinTechs, Corporates
5	End-User	The Consumer	Uses the card to make payments.	Consumers, Businesses

1. Card Networks (Visa, Mastercard, etc.)

These are the schemes that own the global payment rails. They define the rules, set the interchange rates, manage the clearing and settlement process between financial institutions, and enforce security standards (like PCI DSS). 

Crucially, they hold the principal licenses that only banks or financial institutions (FIs) can acquire.

2. BIN Sponsor / Issuer (The Regulatory Backbone)

The BIN Sponsor is the licensed bank or financial institution that holds the Bank Identification Number (BIN). The BIN is the 6-to-8 digit prefix on a card that uniquely identifies the issuing bank and its geographic jurisdiction.

• The BIN Sponsor is the entity with the direct contractual relationship to the Card Network and the one that assumes the ultimate regulatory liability for all cards issued under its BIN. 

• BINs can be issued as single jurisdiction or multi-jurisdictional BINs

• BIN Sponsors can have multiple downstream “clients”

• Becoming a BIN Sponsor is a significant undertaking; historically this role was done only by financial institutions. Now “membership” is offered to other types of financial institutions such as Fintechs which have demonstrated scale and a compliance infrastructure necessary to satisfy the card networks and regulatory bodies.

3. Processor / Banking-as-a-Service (BaaS Layer -The Technical Core)

The Processor is the technological engine that drives every transaction. They connect the Program Manager (FinTech) to the BIN Sponsor and the Card Networks via robust infrastructure and  APIs. This layer is responsible for:

• Real-time Authorization: Checking the cardholder's balance, applying spend controls, and approving or denying a transaction in milliseconds.

• System of Record: Maintaining the definitive account ledger, transaction history, and card management functions (e.g., card activation, PIN set/reset).

• Security & Data: Managing tokenization for digital wallets (Apple Pay, Google Pay) and ensuring data security protocols are met.

• Dual Roles: some processors are also BIN Sponsors.

4. Program Manager (The Customer Facing Experience)

Often the FinTech company itself, the Program Manager is the brand the customer interacts with. They focus on customer acquisition, product design, card rewards, and UX. While they conduct the day-to-day Know Your Customer (KYC) procedures, they do so under the oversight and policies dictated by the BIN Sponsor. Program managers:

• Are responsible for branding, customer acquisition and day to day operations related to onboarding customers, managing KYC 

• Issue physical and/or virtual cards, depending on their back-end capabilities. Program managers are essentially “product managers” when it comes to their card issuing offerings.

• Have fewer fixed costs (i.e. CapEx) than Processors or BIN Sponsors), but in exchange pay monthly fees for card programs and share interchange with their BaaS / Processor / BIN Sponsor partners.

II. Strategic Use of Multi-Jurisdictional BINs

The modern card ecosystem is increasingly global, leading to the strategic use of what are called “Multi-jurisdictional BINs”  that can operate across multiple geographic regulatory environments.

The ability to operate across borders using a unified BIN range is a major driver for FinTechs seeking rapid expansion and centralized operational control, despite the added layer of compliance complexity. Not all BIN Sponsors have multi-jurisdictional BINs.

A Multi-Jurisdictional BIN is a range of card numbers managed by a single Issuer (BIN Sponsor) that can be deployed to cardholders in different countries or territories, often within a common economic area (like the EU or regions where a banking passporting mechanism exists).

Let’s take a closer look at the distinctions between single jurisdiction BINs and  multi-jurisdictional BINs:

Factor	Single-Jurisdiction BIN	Multi-Jurisdictional BIN
Issuing Entity	Licensed in a single country.	Licensed entity can 'passport' services or operate under a single license across multiple territories.
Speed to Market	Slower for cross-border expansion (requires new bank/license in each country).	Faster market entry across supported regions, leveraging one technical integration.
Compliance	Single local regulator and set of rules.	Must comply with the most stringent regulatory requirements across all covered jurisdictions (e.g., PSD2 in the EU).
Technical Stack	Simpler, local processing.	Requires a highly robust and complex processing layer to manage different currencies, tax laws, and settlement requirements under one BIN.

III. To BIN or Not to BIN: Unbundled vs. Full Stack

Now, this is probably the one topic that we get asked the most questions about from robust, well capitalized web3 players and “traditional” Fintechs. When and how can I get my own BIN? The more you cut out other players in the value chain, the better your unit economics, right?

To answer that question you first need to start with grounding yourself in why these different players exist in the value chain. There are very solid reasosn not everyone is issued their own BIN and becomes a BIN Sponsor. It is an enormous operational undertaking and in more recent times, is a business unto itself. 

Historically reserved for the most well capitalized and “safest” institutions, there has been a noted shift in the card schemes’ stance towards non-FI “membership” for BIN issuance. Ultimately gaining a BIN leads to a “fully integrated” model, while card issuing - either as a strategic initiative or a complimentary product offering is done through working in an “unbundled” model.

Model A: The Unbundled Model (Most Common for FinTechs)

• Distinct Roles (3 and 2 are Separate): The vast majority of modern Program Managers work with a setup where a Bank (BIN Sponsor) focuses on the license and compliance (Rank 2), while a separate FinTech/BaaS Platform (Processor) handles the API, authorization, and technology (Rank 3).

• Why it's Common: This provides the Program Manager with the best of both worlds: a licensed partner and cutting-edge, developer-friendly technology.

Model B: The Integrated Model (Traditional or Full-Stack)

• Combined Roles (3 and 2 are the Same): In this scenario, the BIN Sponsor (Bank) uses its own in-house, legacy core banking system to perform the processing functions.

• Why it's Less Common for Startups: While banks often start this way, their legacy processing systems (core banking) are usually not as flexible, fast, or API-driven as modern BaaS providers, making it slower and more difficult for a FinTech Program Manager to build innovative products.

Therefore, the Processor/BaaS layer (Rank 3) is a mandatory function for card issuing, but it is not always a separate legal entity from the BIN Sponsor (Rank 2). Including it in the taxonomy makes it fundamentally more accurate.

IV. The Ultimate Challenge: BIN and Portfolio Migration

As an organization evolves - new capabilities for its card issuing program are needed; new geographies are identified and its card business becomes a strategic pillar for its ongoing success - the decision to switch processors or BIN Sponsors or seek BIN issuance comes to the forefront. 

You may desire a new relationship with a Processor; in that instance you’re rerouting your BIN. Chainging the sponsor bank is switching the BIN. The nuance here is critical. Switching processors but maintaining your BIN is common; switching BIN Sponsors and getting a new BIN is less common and something altogether different. 

Scenario	What It Is	Outcome for Customer
BIN Rerouting	Changing the Processor without changing the Sponsor Bank. The BIN stays with the same bank, but transactions are routed to the new processor's technical platform.	No new cards needed; service continues seamlessly.
Full BIN Migration	Changing the Sponsor Bank (and likely the Processor). The old BIN is retired, and a new BIN is issued by the new sponsor bank.	New cards must be issued, creating significant logistical and customer churn risk.

Though switching BINs may become a strategic business decision, it is a significant operational and technological challenge, which needs to be factored into any strategic buisness plan. 

When an organization switches BIN Sponsors, it most likely incurs a portfolio migration.

A Portfolio Migration is the process of moving an active card program—all accounts, card balances, customer data, and transaction history—from one BIN Sponsor/Processor relationship to another. This is often triggered by:

1. Cost and Service: Seeking a better economic model or superior technology stack (e.g., moving from a legacy processor to an API-first BaaS provider).

2. Regulatory Control: A FinTech acquiring its own license and self-sponsoring its own BINs to reduce dependency on a partner bank.

3. Risk Management: The existing BIN Sponsor exiting a market or changing its risk appetite, forcing the Program Manager to find a new partner.

However, one approach in the event an organization is issued its own BIN, is to retain its existing card program with the current partner, while launching new cards through the newly issued BIN. 

Either way, obtaining your own BIN or BIN migration is a project of not to be underestimated technical and logistical difficulty, carrying existential risk for the FinTech if not executed perfectly. It may be the Minotaur that Theseus must avoid, or slay!

The Migration Breakdown

Phase	Challenge	Risk of Failure
1. BIN Decision	The Card Networks must approve re-routing an existing BIN to a new Processor, or a new BIN must be sourced and approved by the new Sponsor.	Customer Churn: If a new BIN is required, every card must be re-issued, risking high customer drop-off.
2. Data Integrity	Transferring and accurately mapping the entire transaction ledger, KYC records, and especially the Tokenization Vault (for Apple Pay/Google Pay credentials) from the old Processor to the new one.	Card Failure/Fraud: Data corruption can lead to denied transactions, or worse, non-compliance with AML or PCI regulations.
3. Cutover Coordination	Executing a "Big Bang" switch during a planned, compressed downtime window (often a weekend), requiring perfect synchronization between the old Processor, the new Processor, the old Sponsor, the new Sponsor, and the Card Network.	System Downtime: Any service interruption immediately impacts customers, resulting in reputational damage and financial loss.
4. Trailing Liability	Transactions conducted on the old platform (even up to six months prior to migration) may result in future chargebacks (disputes). A legal and operational framework must be in place to manage these disputes across both the old and new systems.	Operational Debt: Unresolved disputes and trailing chargebacks can create massive operational and financial reconciliation burdens for the Program Manager long after the migration is deemed "complete."

Conclusion: Card Issuing is Strategic for Gods and Mortals Alike

The card issuing ecosystem has evolved from a monolithic structure to an agile, multi-partner environment. This has enabled the FinTech revolution but has also created a tightly woven net of dependencies.

For any web3 or FinTech executive, the path to scale depends on selecting partners with a proven track record, not just in launching programs, but in navigating the highly intricate process of Portfolio Migration. Choosing a system that offers flexibility, standardized data formats, and a clear legal path to change partners is no longer a 'nice-to-have'—it is a core strategic imperative for sustained, global growth. Ignoring the complexities of the BIN structure and migration process is to accept a hidden, self-imposed limitation on your business's future.