Magnetic Ink Character Recognition (MICR) is a technology that is used to read characters printed using special magnetic material. They are categorized under input computer devices. MICR is used mostly in banks to verify the authenticity of bank cheques and other financial documents.
The characters on these documents are printed using special ink that contains iron oxide particles. The magnetic ink character reader is then used to read the character by sensing the magnetic material.
The use of MICR increases the accuracy of document reading and reduces fraud when dealing with cheques. However, they are expensive, require special fonts, and can be affected by other magnetic objects around them.
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Features of magnetic ink character recognition.
Magnetic ink character recognition technology has a number of unique characteristics that makes it special.
First, it uses magnetic ink to print and process characters on financial documents. The character specifically on the bank cheques is referred to as the MICR line.
Secondly, it uses special fonts and characters for the digits. The 2 main MICR fonts used are CMC-7 and E-13B. These 2 fonts are adopted worldwide to generate MICR lines for bank cheques.
The MICR number is also unique with 3 parts. The first 9 characters represent the routing number which identifies the issuing bank, while the 12 characters represent the account number associated with the cheque. The last 4 characters then represent the cheque number
Uses of MICR
The main application area of MICR is clearing bank cheques by reading the magnetic ink character recognition line. MICR line is a string of characters that are printed at the bottom of the cheques.
Other than processing bank cheques the technology is also used to process money orders, rebate coupons, and credit card invoices among other documents.
Advantages of magnetic ink character recognition
- Increase cheque clearance accuracy. With the MICR the banks can be able to read the data on the cheque more accurately.
- Reduce fraud. Once the MICR line has been printed on the document cannot be changed which makes it hard to fake the document. Again the MICR reader will detect a cheque that has not used the magnetic character and special fonts to print the cheque. If for example, you present a photocopy of the cheque to be processed then the reader will flag it as fake.
- Fast document processing. The technology helps banks to clear and process many financial documents within a short period of time. Since the process is automated then the documents can be sorted either by originating bank or other criteria for fast processing and decision-making.
- Can read over other writing. Since the character are printed using magnetic ink they can still be read even when we have other writing over the line. The cheque number will still be detected over the stamps, signature, or any other writing.
- Document consistency is maintained since they only use 2 fonts worldwide. This reduces error and improves processing efficiency.
- It uses special characters and fonts. This means anybody who wishes to use the technology should only use the CMC-7 and E-13B fonts and special characters.
- The technology is expensive to use. You will need to use special magnetic toner to print the number and a MICR reader to read and process the document.
- MICR technology is only limited to financial applications and they are not common in other industries.
- Since the technology uses magnetic then it is more likely to have magnetic interference that can alter the document.