What is a PAN number?
A Primary Account Number (PAN) is crucial for card payments and processing. When you make a payment, the PAN ensures that your account is correctly identified within the payment system, allowing the transaction to proceed. Without the PAN, the system wouldn’t be able to validate or process your card transactions accurately.
In this guide, we’ll break down what is a PAN number, how it works, and how it differs from other financial codes you need to send money internationally.
What is a Primary Account Number (PAN)?
A Primary Account Number (PAN), also known as a payment card number, is the series of numbers embossed or printed on the front of a credit, debit, or prepaid card. This number is assigned by a financial institution and identifies the issuer and the specific account. This number ensures that the card is properly linked to the correct account when you send money to a bank account.
So, what does PAN stand for in banking? The PAN is typically 16 digits but can range from 12 digits to 19 digits, depending on the card issuer. The digit sequence is divided into parts that serve a specific purpose. Here’s how a 16-digit PAN sequence is structured:
- First digit: The first digit is the major industry identifier (MII) and categorises the card issuer, such as banking, travel, or retail.
- First six to eight digits: The first six to eight digits form the Issuer Identification Number (IIN) or Bank Identification Number (BIN), which identifies the specific institution that issued the card.
- Next seven to nine digits: These digits are the unique account identifier that links the card to the specific cardholder account.
- Last digit: Known as the check digit or checksum number, this number is used for validation purposes to ensure that the PAN is entered correctly during transactions.
PAN vs account number
PANs and account numbers have different purposes. An account number is linked directly to your bank account and is used for various banking activities like deposits, withdrawals, and transfers. A PAN is specific to your card and is used for processing payments and transactions involving that card.
Is a Primary Account Number the same as a Permanent Account Number?
A Primary Account Number is not the same as a Permanent Account Number, even though both share the acronym “PAN.” A Permanent Account Number is a 10-digit code issued by the Income Tax Department in India. It is used for paying income tax, receiving tax refunds, and ensuring that all monetary activities are linked to the correct taxpayer.
How do PANs work?
The PAN number plays a role in swift card payment processing. Here’s a step-by-step breakdown of how it works during a transaction:
- Card entry: When you swipe your card, insert it into a chip reader, or enter the PAN manually for an online purchase, the payment terminal captures the PAN from your card.
- Transaction initiation: The PAN, along with other transaction details such as the amount and merchant information, is sent to the card network.
- Authorisation: The card network uses the PAN to identify your issuing bank and sends the transaction details to the bank for authorisation.
- Approval or denial: The issuing bank checks the linked account to see if sufficient funds or credit is available. If everything checks out, the bank sends an approval message back through the network to the payment terminal, completing the transaction.
If you’re using a money transfer app, you won’t need to use a PAN card number. Instead, you will need to provide your bank account details or another identifier like a routing number, depending on the type of transfer.
How do PANs work for virtual cards?
PANs work differently for virtual cards. Virtual cards are digital versions of your physical cards, often stored in your digital wallet. If you’ve used Apple Pay or Google Pay, you’ve used a virtual card.
Unlike physical cards, virtual cards generate temporary or one-time-use PANs. These PANs expire after a single transaction or a short period. This helps protect your primary account details while you shop online.
PAN card security features
PAN card numbers are sensitive information that need to be protected from fraudulent activities. The Payment Card Industry Data Security Standard (PCI DSS) sets the guidelines for safeguarding PANs.
Here are some key security features:
Encryption
PANs are encrypted when stored and transmitted to keep your information safe. Encryption converts the PAN into a secure code that can only be deciphered with a specific key. This ensures that even if the PAN is intercepted during transmission or compromised in storage, it remains unreadable to unauthorised parties.
Truncation
Truncation is a security measure that removes most of your PAN when it’s displayed, such as on receipts or online platforms. Usually, only the last four digits are visible. For example, on a receipt, a truncated PAN might appear as just 1234.
Tokenisation
Tokenisation replaces the PAN with a randomly generated identifier called a token. This token removes any connection between the transaction and the sensitive information, meaning it has no exploitable value if intercepted. This token can be used for the transaction while the actual PAN is securely stored.
Masking
Like truncation, masking involves showing only part of the PAN while keeping the rest hidden. Masking involves replacing the hidden digits with symbols like asterisks. For example, a masked PAN can look like **** **** **** 1234.
Difference between PAN and other bank account codes
While the PAN is vital for card transactions, it is different from other bank codes like BIC and SWIFT which are details used for international money transfers. These codes are used to identify banks rather than individual accounts.
BIC
A Bank Identifier Code (BIC) is a number used to identify a specific bank when you make an international payment. BICs ensure the accurate routing of funds in global money transfers. A PAN identifies your individual account for card transactions, while a BIC identifies the bank.
SWIFT
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) code is another identifier used in international money transfers. SWIFT codes are more comprehensive than BIC as they include information about the bank and the specific branch. A SWIFT code ensures your money is routed to the correct financial institution in cross-border transactions, unlike a PAN which identifies your personal account for card payments.
FAQs
What is a PAN number in the UK?
In the UK, a PAN number refers to the number on your credit or debit card. It is used to identify your specific account and for processing online and in-person card transactions.
How can I know my PAN number?
Your PAN number is the number embossed or printed on the front of your credit or debit card. If you do not have your card on hand, you can typically find the PAN by logging into your bank’s online portal or app.
What does PAN number mean?
A PAN number is a unique identifier assigned to your credit or debit card. It is used to link transactions to your specific account during payment processing, ensuring that your money is accurately transferred.
