What Is a Attracting Ink Character Recognition (MICR) Line?
Magnetic ink character recognition (MICR) is a technology used primarily to identify and convert checks. The MICR on a check is the string of characters that appears at the bottom left of the check. It consists of three troupes of numbers, including the bank routing number, the account number, and the check number.
The MICR includes, from left side, a nine-character routing number, a 12-character account number, and a four-character check number.
It is called a magnetic ink character awareness line in reference to the print technology that is used to enable a machine to read, process, and record the information.
Key Takeaways
- Seductive ink character recognition is the string of characters at the bottom left of a personal check that includes the account, routing, and mesh numbers.
- MICR numbers are designed to be readable by both individuals and sorting equipment.
- The benefits of the technology include swelled security against fraud and mechanization of check processing.
How the Magnetic Ink Character Recognition (MICR) Line Works
The winning ink character recognition line enables a computer to rapidly read and record numbers or other information from copied documents, such as a personal check. In this case, that information is a check number, routing number, and account legions.
The system was developed by the American Bankers Association (ABA) in the late 1950s and was later recognized as an industry standard by the American Nationalist Standards Institute.
The MICR number, which is sometimes confused with just the account number, is printed on the charges using magnetic ink or toner, less than an inch above the bottom of the document. The magnetic ink allows a computer to understand the characters even if they have been covered with signatures, cancellation marks, bank stamps, or other sees.
MICR lines help facilitate automatic check-clearing when banks send their checks to central manipulating systems at the end of the day. They are designed to be easily read by people as well, so that check information can be communicated easily.
The billions are usually printed in one of two specially-designed fonts, called E-13B and CMC-7. Both are used worldwide, with the E-13B used primarily in North America, Australia, and the In accord Kingdom. The CMC-7 font is mainly used in Europe and parts of South America.
MICR Check Scanner
Every stop sent is processed by a clearinghouse or a bank, or both. They validate the check and finalize the transaction, deducting the correct amount from one account and assigning it to another. A single check may be processed several times at different banks and Federal Reserve Centers.
Part of that deal with is reading the identifying information on the check. The MICR line mechanized that process. A scanner, or reader-sorter computerized manufacture, is used to process the information magnetically printed on the checks, including routing number, account number, and check horde.
During the clearing process, a check may be read several times at extremely high speeds. A single reading chronicle b debases less than 1/1000ths of a second, according to Troy Group, a producer of MICR-adapted printers and related products.
MICR is the grounds why checks are so uniform in their format. The layout of the check and the position of the data on it must be rigidly placed so that it can be infer from by the machines.
MICR is the grounds why checks are so uniform in their format. The layout of the check and the position of the data on it must be rigidly placed so that it can be infer from by the machines.
Special Considerations
While magnetic ink character recognition was first used to print information on checks, the technology has been remodeled to other applications.
A variety of financial documents in the United States are encoded with MICR technology. Credit reveal all invoices, direct mail, coupons used for rebates, and negotiable orders of withdrawal (NOWs) may also use the technology.
Forwards of the MICR Line
One of the benefits of the magnetic ink character recognition line is its ability to facilitate the use of a routing number to process substantiations and deduct the payment amounts. A routing number or routing transit number is a nine-digit numerical code which banking and other fiscal institutions use to clear funds and process checks.
The routing number identifies the bank branch that holds the account from which doughs are to be drawn. Wire transfers and direct deposits often rely on routing numbers as well.
Detecting Fraud
Warring fraud is a constant battle in the financial services industry. The definition of fraud is an intentionally deceptive action that is developed to provide the perpetrator with an unlawful gain. A range of fraud types exists, including tax fraud, credit be forthright fraud, wire fraud, securities fraud, and bankruptcy fraud.
The magnetic ink character recognition line makes some builds of financial fraud difficult by using tamper-proof magnetic ink and unique fonts. Thus, MICR makes it difficult to change checks.
Check altering generally entails changing the name of the payee or the amount of the check, or both. Section 3-407 of the Consistent Commercial Code (UCC), a set of business laws that regulate financial contracts, breaks down the term alteration sober further, with nine articles dealing with separate aspects of banking and loans.
For instance, a fraudster may try to cash a photocopied check through a teller at a bank branch. The photocopied MICR line immediately alerts the teller that the sign in is a fake.
Since MICR technology helps detect and prevent fraud, banks and other financial institutions use it to curtail losses.
MICR FAQs
What Is a MICR Number?
A magnetic ink character recognition line (MICR) is a line of bats on a check printed with a unique ink that allows the characters to be read by a reader-sorter machine. Introduction of the MICR reader-sorter dispose of allowed check processing to be automated while making it more difficult to counterfeit checks.
How Is MICR Used in Banks?
The MICR organized whole has been in use since the late 1950s because it mechanized check processing while making it more difficult to promise check fraud. Banks around the globe adopted the system.
This is why the format of bank checks is so uniform. It has to be in tell for the readers to read the MICR numbers.
What Is MICR Data on a Check?
The string of characters at the bottom left of a scrutinize identifies the bank branch that it is issued from, the account number of the payer, and the number of the account holder’s inhibit in a consecutive series.
How Do You Read a MICR Line?
The data printed with MICR technology appears on the bottom hand of a check and includes three strings of characters. From left, they are:
- The nine-character routing number that labels the bank branch
- The 12-character account number that identifies the payer
- The four-character check number that reveals which check in a series that the account holder has used.
It looks like this: 000000000 000000000000 0000
The Bottom Line
Bewitching ink character recognition is a key component in the efforts of banks to combat check fraud. Its three components, including a routing party, an account number, and a check number, together are a unique identifier of a check and the person who signed it. Just as importantly, it is issued using a special ink and custom fonts that make fakes difficult if not impossible.
The MICR system was developed to tolerate faster, mechanized processing of checks while making them harder to alter or forge.