Magnetic Ink Character Recognition (MICR)

Magnetic ink character recognition (MICR), which was developed in the mid-1950s, is widely used in the banking industry for marking bank checks. Routing and account information, including bank number and check number, are printed in stylized human-readable characters with ink that has magnetic properties. The characters can be read by specialized magnetic readers even if they are overprinted by cancellation marks or smudges. This equipment, which must make contact with the characters in order to read them, requires precise registration and orientation. MICR readers are not only present at financial institutions; they are becoming a familiar sight at retail point-of-sale stations for use in check authorization.

MICR readers are becoming more visible to the general public as their presence increases at point-of-sale. Because MICR readers can save 30 seconds or more per transaction and they help prevent fraud, retailers will continue to use this technology

Common Applications
Magnetic Ink Character Recognition (MICR) is most commonly used to encode and read information on checks and bank drafts to speed clearing and sorting. It is also effective for uncovering fraud, such as color copies of payroll checks or hand-altered characters on a check, both of which are easily detected by the absence of magnetic ink. Fast clearing and sorting, as well as fraud detection, benefits customers, financial institutions, and retail establishments.

Reprinted with permission from AIM, Inc.
www.aimglobal.org

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