While overall check use has declined over the past 10 years, business-to-business check payments are still going strong and even increasing in value. When handling business transactions, it’s important to ensure you are using a MICR printer when printing checks to prevent fraud and quickly facilitate routing information.
At Source Technologies, we have built our technology around the importance of the MICR line for secure and efficient check and document printing and processing.
What Is MICR?
Magnetic ink character recognition (MICR) refers to the formulation of toner used to print the special font for the account, routing, and check numbers in the bottom left-hand corner of a check. MICR numbers are readable by individuals and computers, however, their special font combined with magnetic ink helps to prevent check fraud.
There are two main fonts used by MICR check printers today: E-13B, which is the standard when printing checks in the United States, and CMC-7. Below is an example of the E-13B MICR font.
Understanding MICR Toner
Different from regular laser toner, MICR toner contains iron oxide, a requirement of the Federal Reserve, making check-clearing a more efficient process.
This specialized MICR toner enables checks and other negotiable documents to pass through high-speed readers/sorters in the clearing process. The reader/sorter machine sends a magnetic charge to the paper, and this is how the machine reads the routing number and account information contained within the MICR line.
When a check or other negotiable document is printed using regular non-MICR toner, the reader/sorter will reject the check as it’s considered to be suspected of fraud. This results in a bank fee for the company that printed the document.
5 Key Benefits of MICR Check Printing
Here are the top five benefits of a secure MICR check printing solution.
1. Reduces Expenses Associated With Pre-Printed Checks
Secure MICR check printing software prints all static data and variable data on blank check stock in a single printer pass. This secure print solution means no more expense associated with purchasing, storing, distributing, and tracking pre-printed checks.
The savings from pre-printed check costs alone often exceed 80%.
2. Minimizes the Risk of Official Check Fraud
According to NICE Actimize, between 2021 and 2022, the average attempted check fraud dollar amount increased by more than 171%.
Our MICR printers are equipped with 15 distinct security features to fight a variety of check fraud schemes. Plus, with the elimination of pre-printed checks, this secure print solution prevents the theft of what are effectively blank checks — more on that below.
3. Eliminates Manual Errors
When manual processes are replaced with automation using a MICR check printing solution, the potential for human error is significantly reduced. “MICR toner detection” ensures the right toner is in the printer when the check is printed. Additionally, “Set Copies to 1” and “Jam Recovery OFF” are two settings that ensure only one copy of each check is printed.
4. Decreases Time Spent Issuing an Official Check
The process of issuing checks in the branch is typically a painful process for everyone involved because of the amount of time it takes. MICR check printing replaces this manual process that includes pre-printed checks and a dot-matrix printer or typewriter, which can take 10 minutes or more.
With a secure MICR solution, the time is reduced to two minutes or less because the check is printed on demand.
5. Records Check Data Automatically
When a check is sent to the secure MICR printer to be printed, the static data, variable data, and MICR line are all printed at once in a single printer pass.
With our secure print solutions, the issuance data is simultaneously captured electronically and automatically sent to the appropriate back office systems. No more manual reconciliation.
On-Demand MICR Check Printing vs Pre-Printed Checks
There are two options when issuing a check:
- A company can either purchase pre-printed check stock with the MICR line already encoded on it.
- Or they can purchase blank check stock without the MICR line and utilize a secure MICR printer with MICR toner and print checks on-demand using blank check stock.
As mentioned above, using check stock with the MICR line pre-printed presents security concerns, which can impose workflow inefficiencies. Pre-printed checks are equal to an open checkbook — all a criminal needs to do to start issuing fraudulent checks on the account is to walk off with the check stock.
Because of this, security protocols such as chain-of-custody and audit controls are required to ensure checks do not get into the wrong hands. These security requirements slow down the process of issuing a check and are cumbersome to the staff by adding additional mundane tasks that are easily avoided by printing on-demand using blank check stock.
On the other hand, when a company prints checks on-demand, applying the MICR line at the time of print, it increases security, saves time and money, and can improve the employee and consumer experience.
Check stock without the MICR line imposes no risk; the paper is worthless without the company’s account number and routing number. In addition, when a company implements a secure MICR solution, they gain the ability to add additional security features to the paper at the time of print that reduces the ability to alter the check once it leaves the printer tray.
Threat reduction leads to time saved by eliminating the requirements for chain-of-custody and audit controls, which equates to reduced issuance and labor costs. Employees are happier with the eradication of tedious audit requirements, and waiting consumers are happier with faster service.
MICR Check Printing Industry Applications
When you think of check printing, the first image that comes to mind may be purchasing a cashier’s check or money order at your local community bank. But did you know that most businesses still depend on MICR technology to make payments via corporate checks?
Auto dealers also heavily rely on MICR when they purchase a car from a customer or when a rebate check is printed and issued.
Insurance is another industry that greatly depends on MICR checking printing. Typically, when a claim is approved, a check is released from the insurance company to the consumer. These checks must meet federal check printing guidelines, and the MICR line must be printed with MICR toner.
Other applications for MICR check printing include:
- Grain elevators paying farmers
- Consumer loan companies disbursing loans
- Payroll for temporary employees or contractors
MICR toner is all around us and used every day. In fact, each year billions of transactions across the country are paid using checks. Some transactions are required to be made with a check, such as cash on-delivery (COD) transactions and good funds disbursements, or a business may simply want to float payments.
Our MICR check printers eliminate the need to purchase, maintain, store, and distribute pre-printed check stock because we print the static and variable data on blank check stock in a single printer pass.
We add 15 distinct security features to our printers to help our customers reduce their exposure to check fraud, and we offer a MICR Guarantee to back our solution.
The Future of MICR
Checks and substitute checks (IRDs) are legally required to include a magnetic code line to be treated as a “cash item” for processing in the U.S. Payment System based on Federal Regulation CC section 229.2(u)(4). Given this regulation, companies will be required to use MICR for their check printing needs well into the future.
At Source Technologies, our primary mission is to empower financial institutions and retail businesses to become more efficient, secure, and consumer-centric by integrating our secure MICR printing solutions into the establishments.
To learn more about how secure print solutions like our MICR check printing software can revolutionize your business, contact us today.
