What is MICR?

By RaiChel Ronayne

The line of numbers and symbols located at the bottom of checks is called the Magnetic Ink Character Recognition (MICR) line. The MICR line is composed of special numbers and symbols that contain a check, routing and account number. The check number makes each MICR line unique and guards against any error that may result in a duplicate check number. The routing number is a code assigned to the financial institution where the checking account is located and the check account number is the payor’s checking account number.

By the 1950's, the amount of checks written by consumers increased dramatically and the banking industry faced a dilemma: how to continue processing checks quickly and efficiently? In response to the banking industry’s need, the Stanford Research Institute developed MICR as part of a new computerized processing of checks. A MICR scanner reads the information from the MICR line to process individual checks.

After the introduction of the MICR line, several different types of inks were tested to help MICR scanners read the line without errors. The scanners could not decipher the line if signatures, stamps or other processing marks were written over any of the MICR characters. Magnetic ink solved the problem. The scanners were designed to detect the magnetic qualities of the ink even through several layers of other inks.

Before the addition of magnetic toner, MICR scanners used an Optical Character Reading (OCR) technology to read the MICR line but there were many scanning errors. Today, some financial institutions are again trying out OCR technology on a limited basis. With modern technology, scanner errors occur less than in the 1950’s; however, some of the same problems still exist.

Some check writing or check printing software companies may claim that OCR is widely used so printing the MICR line with magnetic ink is no longer necessary. However, a check can be processed by several different financial institutions and the likelihood that all these institutions have OCR scanners is not realistic.

If a check writing or printing program does not print the MICR line, check stock can be purchased with pre–printed MICR lines. Or a MICR font can be purchased as an add–on to a check writing program or installed as a separate program. In either case, printing a check will require two passes through the printer: once to print the MICR line and a second time to print the check information.

Although MICR includes “ink” in its name, you should print the MICR line with magnetic toner instead of ink because the magnetic particles in ink settle to the bottom. If a check writing or printing program does print the MICR line, the entire check should be printed in magnetic toner. Magnetic toner is more expensive than regular ink but the cost savings compared to extra fees associated with manual check processing or check rejection is minimal.

References

Bellis, Mary ERMA–The Evolution of Computerized Banking. Retrieved July 20, 2006, from About Web site: http://inventors.about.com/library/inventors/bl_ERMA_Computer.htm?terms=MICR

Remick, Kristi (2006, April 3). Printing Your Own Checks. Retrieved July 18, 2006, from ADVANTAGE Laser Products, Inc. Web site: http://advantagelaser.stores.yahoo.net/pryoownch.html

Pritchard, Justin Before You Print Your Own Checks–What You Need to Print Your Own Checks. Retrieved July 25, 2006, from About Web site: http://banking.about.com/od/checkingaccounts/a/printyourchecks.htm

©2003 – 2008 TopTenREVIEWS, Inc.