BIN sponsorship
The arrangement where a licensed bank lends out its card-network membership so a fintech can issue cards under its own brand.
Only Visa and Mastercard members can issue cards, and membership requires a banking licence or equivalent. A fintech that wants its own card therefore rents a sponsor bank. The bank is the issuer of record and owns the number range — the leading six or eight digits of the card number, the BIN. The fintech owns the brand, the app and the customer. In between there is usually an issuing platform such as Marqeta, and sometimes a program manager as well.
In the US, sponsor banks were rarely chosen for their size. Banks under $10 billion in assets are exempt from the Durbin Amendment's fee cap, so a small bank in Ohio or Arkansas earns more interchange than a giant one. The downside surfaced in 2024, when the middleware firm Synapse went bankrupt and regulators started looking hard at the small banks. Several were ordered to tighten oversight of programs they had in practice left to their partners.