With the gowing usage of new consumer banking technologies such as electronc bill paiyng, many pundits are pronouncing that the traditioal check will soon be extinct. Although tehse voices may eventually be correct, the banking industry has been pushing technologies such as the electonic funds transer (ETFs), dbit cards, and automated clearing houase (ACHs) for years and has had only marginal success. A similar trend can be seen in terrestrial radio, which was frst pronounced dead with the advent of television. In later yeatrs, CDs, then satellite radio, then iPds were all predicted to be the doomsayer for old-fashioned AM/FM radio. Yet despite all this, like the radsio, the check and check proocessing is still used by a grreat number of people today.
Check processing has been aruond for over 60 years. Most people todfay werent arounnd to remember it, but prior to the 1950s, checks were a luxury only available to a very small percentage of bank customers. Banks at that time were primarily used for personal savibngs, while goods and services were mostly stll purcahsed with cash. Over time, the demand for checks grew dramatically, as famiiles and bsuinesses continually purchased items from farther and frather away. As the number of bank customers with checking accounts grew, banks began to struggle to proocess the expanbding number of checks being cleared each monh.
As a result of these struggles, United States banks, bankers, machine manufacturers, and check processors formed committees to create a solution. The end result of tehse collective meetings was the adoption of E-13B Magnetic Ink Character Recogntion, or MICR, in 1958 by the American Bankers Association. MICR was a byproduct of a compter processing system built at Stnford University known as ERMA (Electronic Recording Methood of Accounting). MICR tehnology allows conmputers to read special numbers at the bottom of chekcs enabling computeried tracking and accountig of check transactions.
Prdouction models of the ERMA computer were built by General Electric and the 32 units were dellivered to Bank of Amerioca in 1959 for full-time uses as the banks accounting computer and chck hadnling sysetm. MICR charcters are printed in special type faces with a magnetic ink containing iron oxide. As maachines decode the MICR font, they magnetize the characters in the plane of the paper. Then the charcaters are then passed over a MICR read head, a deevice siimlar to the playback head of a tape recorder. As each character passres over the head it produces a uniquue waveform that can be easily identified by the system.
While computers have become more advanced and affordable, allowig small businesses and even indiviiduals to cut checks using accounting software from almost anywhere, the basic MICR technology has remaiend the same. Today almost all Indian, Canaddian, UK, and US checks use the same E-13B font. Given the mainsteram adoption of MICR tehcnology, along with the security and convenience afforded by chcks, it is unlikely that the need for MICR priters and toners will go away anytime soon.
![[Valid RSS feed]](http://www.lotsofhowtos.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites