The common machine language specification for the paper-based payment transfer system, as defined by the American National Standards Institute (ANSI). It consists of magnetic ink printed characters of a special design, which can be recognized by high speed magnetic recognition equipment. The special designed characters are known as E-13B or CMC-7 depending upon the area of the world. Standards indicating how to print MICR have been developed as a way to create an industry standard; adhering to these guidelines provides consistency throughout the financial industry.
These standards provide specific information regarding: character use, placement on the check, as well as character specifics including uniformity of ink, character dimensions, and signal strength ranges, etc. When checks adhere to these guidelines the end result is a negotiable instrument of high quality. However, when checks do not comply with the standards it can result in rejected checks and unnecessary processing fees.
For more details about printing checks you can review the MICR BASICS HANDBOOK developed by TROY.
What is MICR Printing?
Magnetic Ink Character Recognition as defined by the American National Standards Institute (ANSI) is the common machine language specification for the paper-based payment transfer system. The specialized ink is required to achieve a Magnetic Signal and is generally available in ribbons used in a high impact printing system or in toner used in laser printing. Due to a high level of inconsistency, settling and nozzle clogging you will NOT find widespread use of MICR cartridges for use in ink jet printers.
The characters produced with the magnetically chargeable ink are known as E-13B or CMC-7 depending on the geographic area where you are printing your financial documents. E-13B, which was developed in the United States, is used in: United States of America, Canada, Australia, United Kingdom, Japan, India, Mexico, Colombia, and Turkey. CMC-7, which was developed by a French Computer Company, is used in: France, Spain, Israel, South America (except Colombia) and other Mediterranean Countries. MICR technology is used in the banking industry in many countries because it allows very fast and reliable document processing.
- When printing checks it is important to follow the appropriate standards as rules, which indicate character placement, signal strengths, as well as recommended paper specifications. Each specification has been established to create a document which can easily and accurately read when presented to a bank.
To review ANSI standards as well as definition of terms review ANSI ASC X9 TR 100-2006
visit ANSI Standards. To review CPA standards review CPA Standard 006 or visit Canadian Payments or TROY's MICR Page.
In the 1950’s the demand for data processing created the need for a mechanized method of check processing. In attempt to find a solution that would accommodate the growing volume of checks banks, bankers, machine manufacturers, and check processors formed committees which provided suggestions on ways to create automation in the check processing department.
As a result in 1958 the American Bankers Association adopted E-13B as a standard format for printing checks. These specially shaped magnetically charged characters are printed on the bottom of bank documents to allow easy and consistent readability.
Today, the American National Standards Institute (ANSI) provides the specifications for check printing. This document is available on the ANSI website: www.x9.org
Prior to MICR there were two methods that were used to process large batches of checks. These older methods were known as Sort-A-Matic and Top Tab Key Sort.
The Sort-A-Matic process was made up of 100 dividers numbered 0 through 99 and each divider was composed of either metal or leather. The Sort-A-Matic process sorted check through a stepped or phased process. After reviewing the first two numbers of the account, the checks were placed into a divider. Then they were grouped by the second two numbers of the account and so forth, until the checks were in numerical order by account number.
The Top Tab Key Sort used a slightly different process. This system used a technology which required holes to be punched in the top of each check indicating the ones, tens and hundreds digits. When it was time to sort the checks a metal key was inserted into the checks separating them by the corresponding holes until they were put into numerical order by account number.
As the number of individually written checks began to increase each system became time consuming and outdated. Thus the technology evolved to what we currently use today.
How it Works:
The E-13B font, which is needed for the clearing process, is printed with magnetic ink near the bottom of the check, known as the MICR Clear Band. After printing checks are then processed mechanically and electronically through a reader-sorter machine. With the ability to read the E-13B characters through a reader-sorter device at a rate less than 1/1000th-of-a-second per character, the time and cost of check processing have decreased over time.
The machine reads each MICR Clear Band from right to left and recognizes each character based on the shape and unique magnetic waveform of each individual character. This unique shape creates peaks and valleys within the waveform, which result in a read of the character.
The high rates of speed as well as the magnetic waveform created make it imperative that each character is precise. The slightest flaw in the character could create an inaccurate read. Each character must be free from extraneous or irregular marks. When extraneous toner exists within the MICR clear band, the reader-sorter will reject the document. It is imperative that the MICR Characters are accurately printed on each document according to specifications defined by the American National Standards Institute (ANSI) (www.x9.org).
For more information about How it Works view the Basics Handbook created by TROY MICR Basics Handbook.