Personal checks are a banking necessity that will never be entirely eliminated; even with electronic banking. Technology has improved through the decades and today customers can rest assured that their checking information is secured thanks to MICR.
MICR (Magnetic Ink Character Recognition) is the process by which information is encoded on personal checks. This system of information coding was developed in the mid 1900's.
It became almost universally accepted by the mid 1960's. Documents which contain MICR coding can be read by any institution's system just about everywhere in the world.
All business and personal checks have this type of coding printed on them. It is usually found on at the bottom left of the document. It appears as a series of symbols and numbers.
Magnetic Ink Character Recognition has two font types in use throughout the world. The most commonly used type is E-13B. It is the one most generally accepted and is the only one used by North American banks.
The E-13B font system contains a total of 14 characters. It has nine number characters, which are the numbers zero through nine.
The remaining four characters are symbols developed specifically for banking. All four of these symbols appear on most business and personal checks.
The first is two parallel horizontal lines followed by a bold square. This symbol means "on us" and usually appears to the right of the account number.
Another character appears as a single bold horizontal line beside a bold colon. This means "transit" and refers to the bank branch routing number.
The third symbol is a series of three horizontal parallel lines. They are printed on an upward angle, with the outside lines bolded. This is known as the "amount". It delimits the amount of a transaction.
The final character is the "dash". It looks like three short horizontal parallel lines, with the first two lines bolded. It delimits parts of numbers and may act as a separator between numbers.
In theory, there are no duplicate MICR codes in the world. This coding system helps to distinguish one person's financial information from another. It also helps a bank determine where personal checks originate from and from where to draw the money.
The system was introduced as a means of replacing the human reader. Instead, they are "read" by a magnetic computerized scanning machine. The characters themselves are printed with a special magnetic ink.
When the document is placed on the machine, it first magnetizes those symbols. Next, the document is scanned by the machine.
The characters produce a unique waveform which is detected by the machine. It then translates these waveforms into the correct account information.
This form of electronic information decoding is different from bar coding in two major ways. First, bar codes cannot be decoded by the human eye. The information in a MICR code, however, can be easily read and interpreted by the human eye.
Secondly, MICR is less prone to become obscured by smudging or overprinting as bar coding. This makes the scanning process faster and more reliable with less rejection by the machine.
Magnetic Ink Character Recognition was introduced for reasons of efficiency and security. A thousand MICR codes can be read in a fraction of the time it would take a human being to do the same thing.
Business and personal checks are much more secure when they contain this information. The information is difficult to tamper with or reproduce.
It cannot simply be photocopied. This ensures that even if an account holder loses their personal checks, their bank account can't be breached by simply copying the document.
It makes no difference, for this reason, where business or personal checks are printed or purchased. The MICR information is printed on each document whether ordered from the bank, a printer or an online cheap check store.
The notion that personal checks are less secure if purchased outside the bank is a misconception. The Magnetic Ink Character Recognition code ensures security regardless of origin.