What is PAN?

A PAN (Primary Account Number) is the unique identifier printed or encoded on payment cards, such as credit and debit cards, used to distinguish individual customer accounts during transactions.

The PAN typically includes 16 digits (sometimes 13 to 19 digits) and serves several crucial functions:

• Identification: Clearly identifies the customer’s account and issuing bank.
• Transaction Authorization: Enables financial institutions to approve or decline transactions based on the cardholder's available funds or credit.
• Account Management: Helps banks and card issuers manage accounts, track usage, and provide statements.

A PAN consists of several segments:

• Issuer Identification Number (IIN): The first six to eight digits identifying the issuing bank.
• Account Number: The digits following the IIN, specific to the individual cardholder.
• Check Digit: The final digit used for validation purposes.

Securing the PAN is essential to protect against fraud, making technologies like tokenization and advanced authentication methods like passkeys critical in modern payment processing.

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The Primary Account Number (PAN) follows a structured numbering system defined by international standards (ISO/IEC 7812). Understanding this structure helps identify payment cards and issuing entities quickly:

• Issuer Identification Number (IIN): This is the first 6-8 digits and identifies the issuing bank or institution. For instance:

  • Visa cards typically begin with a "4".
  • Mastercard cards start with numbers between "51" to "55" or "2221" to "2720".
  • American Express cards usually begin with "34" or "37".

• Individual Account Identifier: Following the IIN, these digits uniquely identify the specific customer account and cardholder. They are issued sequentially by the card issuer and are unique to each cardholder.

• Check Digit (Luhn Check): The final digit of the PAN is called a check digit. It's calculated using the Luhn algorithm to verify the card number's validity, reducing input errors and fraud attempts.

Given its critical role in transactions, PAN security is a primary concern. If compromised, the PAN can be exploited in fraudulent activities, leading to financial loss for customers, merchants, and financial institutions. Major security issues include:

• Card Fraud: Unauthorized use of PAN information for purchases or financial gain.
• Identity Theft: Fraudulent transactions leading to financial losses or compromised personal information.
• Data Breaches: PANs are high-value targets for cybercriminals, often stolen through hacking or phishing attacks.

To protect PAN data effectively, modern payment systems implement robust security technologies and methods:

• Tokenization: Replaces sensitive PAN information with a unique identifier ("token") during transactions, limiting exposure of real account numbers.

• Encryption: PANs are encrypted during storage and transmission, preventing unauthorized access.

• Passkey and Multi-factor Authentication (MFA): Authentication methods such as passkeys replace vulnerable passwords, enhancing user authentication security. These technologies dramatically reduce the likelihood of fraudulent use of PANs by unauthorized individuals.

Passkeys represent an innovative solution enhancing the security of payment systems involving PANs by:

• Eliminating Password Risks: Reducing fraud risks associated with phishing or credential theft.
• Streamlining Transactions: Providing a frictionless and secure transaction experience, increasing customer satisfaction.
• Lowering Fraud Costs: Decreasing financial losses and chargebacks for merchants and issuers.

Implementing advanced authentication methods like passkeys is critical for banks, payment providers, and merchants seeking robust PAN protection and a seamless customer experience.

PAN stands for "Primary Account Number," which uniquely identifies a customer's payment card account during transactions.

A PAN typically contains 16 digits, but depending on the card issuer, it can range from 13 to 19 digits.

PAN security prevents financial fraud, identity theft, and unauthorized access, protecting consumers and businesses from significant financial losses and data breaches.

PAN data can be secured through methods like tokenization, encryption, and advanced authentication methods such as passkeys and multi-factor authentication (MFA).

A real-world PAN example is the 16-digit number embossed on your Visa or Mastercard credit card, used to process transactions securely and uniquely identify your account.