Magnetic Ink Character Recognition (MICR) Line

What Is a Magnetic Ink Character Recognition (MICR) Line?

Magnetic ink character recognition (MICR) is a technology utilized fundamentally to recognize and deal with checks. The MICR on a check is the string of characters that shows up at the base left of the check. It comprises of three groups of numbers, including the bank routing number, the account number, and the check number.

The MICR incorporates, from left, a nine-character routing number, a 12-character account number, and a four-character check number.

It is called a magnetic ink character recognition line in reference to the print technology that is utilized to empower a machine to peruse, cycle, and record data.

How the Magnetic Ink Character Recognition (MICR) Line Works

The magnetic ink character recognition line empowers a computer to peruse and record numbers or other data from printed documents, for example, a personal check quickly. In this case, that data is a check number, routing number, and account number.

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 National Standards Institute.

The MICR number, which is sometimes mistaken for just the account number, is printed on the check utilizing magnetic ink or toner, under an inch over the lower part of the document. The magnetic ink permits a computer to peruse the characters even on the off chance that they have been covered with marks, cancellation marks, bank stamps, or different imprints.

MICR lines assist with working with automatic check-clearing when banks send their checks to central processing systems by the day's end. They are intended to be handily perused by individuals too, so that check data can be imparted without any problem.

The numbers are typically printed in one of two specially-planned textual styles, called E-13B and CMC-7. Both are utilized worldwide, with the E-13B utilized basically in North America, Australia, and the United Kingdom. The CMC-7 text style is principally utilized in Europe and parts of South America.

MICR Check Scanner

Each check sent is handled by a clearinghouse or a bank, or both. They approve the check and settle the transaction, deducting the right amount starting with one account and crediting it then onto the next. A single check might be handled several times at various banks and Federal Reserve Centers.

Part of that cycle is perusing the recognizing data on the check. The MICR line motorized that interaction. A scanner, or peruser sorter computerized machine, is utilized to deal with the data magnetically printed on the checks, including routing number, account number, and check number.

During the clearing system, a check might be perused several times at very high paces. A single perusing takes under 1/1000ths of a second, as indicated by Troy Group, a producer of MICR-adjusted printers and related products.

MICR is the motivation behind why checks are so uniform in their organization. The format of the check and the position of the data on it must be inflexibly positioned with the goal that it very well may be perused by the machines.

Special Considerations

While magnetic ink character recognition was first used to print data on checks, the technology has been adjusted to different applications.

Various financial documents in the United States are encoded with MICR technology. Credit card solicitations, direct mail, coupons utilized for rebates, and negotiable orders of withdrawal (NOWs) may likewise utilize the technology.

Benefits of the MICR Line

One of the benefits of the magnetic ink character recognition line is its ability to work with the utilization of a routing number to handle checks and deduct the payment amounts. A routing number or routing transit number is a nine-digit mathematical code which banking and other financial institutions use to clear funds and cycle checks.

The routing number recognizes the bank branch that holds the account from which funds are to be drawn. Wire transfers and direct deposits frequently depend on routing numbers too.

Identifying Fraud

Combating fraud is a steady fight in the financial services industry. The definition of fraud is an intentionally tricky action that is intended to furnish the culprit with an unlawful gain. A scope of fraud types exists, including tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud.

The magnetic ink character recognition line makes a few forms of financial fraud troublesome by utilizing sealed magnetic ink and unique textual styles. Hence, MICR makes it challenging to change checks.

Check adjusting generally involves changing the name of the payee or the amount of the check, or both. Section 3-407 of the Uniform Commercial Code (UCC), a set of business laws that regulate financial contracts, breaks down the term modification even further, with nine articles dealing with separate parts of banking and loans.

For example, a fraudster may endeavor to cash a copied check through a teller at a bank branch. The copied MICR line promptly cautions the teller that the check is fake.

Since MICR technology distinguishes and prevent fraud, banks and other financial institutions use it to limit losses.

The routing number, account number, and check number consolidate to make a unique identifier for each check.

MICR FAQs

Here are the responses to a few normally posed inquiries about the magnetic ink character recognition (MICR) line.

What Is a MICR Number?

A magnetic ink character recognition line (MICR) is a line of characters on a check printed with a unique ink that permits the characters to be perused by a peruser sorter machine. Presentation of the MICR peruser sorter process permitted check processing to be automated while making it more challenging to fake checks.

How Is MICR Used in Banks?

The MICR system has been being used since the late 1950s in light of the fact that it automated check processing while at the same time making it more challenging to commit check fraud. Banks around the globe adopted the system.

For this reason the organization of bank checks is so uniform. It must be for the perusers to peruse the MICR numbers.

What Is MICR Data on a Check?

The string of characters at the base left of a check distinguishes the bank branch that it is issued from, the account number of the payer, and the number of the account holder's check in a continuous series.

How Do You Read a MICR Line?

The data printed with MICR technology shows up on the base left of a check and incorporates three strings of characters. From left, they are:

The nine-character routing number that recognizes the bank branch
The 12-character account number that recognizes the payer
The four-character check number that demonstrates which check in a series that the account holder has utilized.

It seems to be this: 000000000 000000000000 0000

The Bottom Line

Magnetic ink character recognition is a key part in the efforts of banks to combat check fraud. Its three parts, including a routing number, an account number, and a check number, together are a unique identifier of a check and the person who marked it. Just as critically, it is printed utilizing a special ink and custom text styles that make fakes troublesome on the off chance that certainly feasible.

The MICR system was developed to permit quicker, automated processing of checks while making them harder to change or produce.

Highlights

Magnetic ink character recognition is the string of characters at the base left of a personal check that incorporates the account, routing, and check numbers.
MICR was developed in the late 1950s and is presently being used worldwide.
The benefits of the technology incorporate enhanced security against fraud and motorization of check processing.
MICR numbers are intended to be meaningful by the two people and arranging equipment.
They can't be faked or replicated, due to the utilization of magnetic ink and unique text styles.