MICR code is a character-recognition technology used mainly by the banking industry to ease the processing and clearance of cheques and other documents. The MICR encoding, called the MICR line, is at the bottom of cheques and other vouchers and typically includes the document-type indicator, bank code, bank account number, cheque number, cheque amount, and a control indicator. The technology allows MICR readers to scan and read the information directly into a data-collection device. Unlike barcodes and similar technologies, MICR characters can be read easily by humans. The MICR E-13B font has been adopted as the international standard in ISO 1004:1995, but the CMC-7 font is widely used in Europe, Brazil and Mexico.
There are two major MICR fonts in use: E-13B and CMC-7. E-13B has a 14 character set, while CMC-7 has 15—the 10 numeric characters along with control characters.
The MICR E-13B font is the standard in Australia, Canada, the United Kingdom, the United States, and other countries. Besides decimal digits, it also contains the following symbols:
- ⑆ (transit: used to delimit a bank code),
- ⑈ (on-us: used to delimit a customer account number),
- ⑇ (amount: used to delimit a transaction amount),
- ⑉ (dash: used to delimit parts of numbers—e.g., routing numbers or account numbers).
Major European countries, including France and Italy, and others like Brazil and Mexico use the CMC-7 font, developed by Groupe Bull in 1957.
MICR characters are printed on documents in either of the MICR fonts. The ink used in the printing is a magnetic ink or toner, usually containing iron oxide. The MICR text is passed before a MICR reader. The ink in the plane of the paper is first magnetized. Then the characters are passed over a MICR reader head, a device similar to the playback head of a tape recorder. As each character passes over the head it produces a unique waveform that can be easily identified by the system.
The use of MICR allows the characters to be read reliably even if they have been overprinted or obscured by other marks, such as cancellation stamps and signature. The error rate for the magnetic scanning of a typical cheque is smaller than with optical character recognition systems. For well printed MICR documents, the "can't read" rate is usually less than 1% while the substitution rate (misread rate) is in the order of 1 per 100,000 characters.
Thus, when the cheque is inserted in the MICR reader (also called a cheque sorting machine), it can read the MICR code even if there are other marks or stamps on it. Thus, the machine easily finds out which bank branch and location the cheque belongs to. Eventually, the cheques are sorted bank, branch and location wise by MICR reader automatically based on the MICR code. Sorting of cheques is done as per the geographical coverage of banks in a nation.
MICR characters were added to the Unicode Standard in June, 1993 with the release of version 1.1.
The Unicode block that includes MICR characters is called Optical Character Recognition and covers U+2440–U+245F:
|Optical Character Recognition
Official Unicode Consortium code chart (PDF)
Before the mid-1940s, cheques were processed manually using the Sort-A-Matic or Top Tab Key method. The processing and clearance of cheques was very time consuming and was a significant cost in cheque clearance and bank operations. As the number of cheques increased, ways were sought for automating the process. Standards were developed to ensure uniformity in financial institutions. By the mid-1950s, the Stanford Research Institute and General Electric Computer Laboratory had developed the first automated system to process cheques using MICR. The same team also developed the E13B MICR font. "E" refers to the font being the fifth considered, and "B" to the fact that it was the second version. The "13" refers to the 0.013 inch character grid.
In 1958, the American Bankers Association (ABA) adopted E13B font as the MICR standard for negotiable documents in the United States. By the end of 1959, the first cheques had been printed using MICR. The ABA adopted MICR as its standard because machines could read MICR accurately, and MICR could be printed using existing technology. In addition, MICR remained machine readable, even through overstamping, marking, mutilation and more.
MICR technology has been adopted in many countries, with some variations. In 1963, ANSI adopted the ABA’s E13B font as the American standard for MICR printing. Although compliance with MICR standards is voluntary in the United States, their use with cheques is almost universal. E13B MICR has also been standardized as ISO 1004:1995. The E13B font was adopted as the standard in the United States, Canada, United Kingdom, Australia and other countries.
In the 1960s, the MICR fonts became a symbol of modernity or futurism, leading to the creation of lookalike "computer" typefaces that imitated the appearance of the MICR fonts, which unlike real MICR fonts, had a full character set.
MICR, or E-13B, is also used to encode information in other applications like: sales promotions, coupons, credit cards, airline tickets, insurance premium receipts, deposit tickets, and more.
E13b is the specifically the version developed for Offset Litho printing. There was a subtly different version for letterpress, called E13a. Also, there was a Rival system named 'Fred' (Figure Reading Electronic Device) which used figures that looked more conventional.
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- ^ ANSI standard X9.27-1995 and ANSI standard ANS X9.7-1990.