What is MICR?

Checks are a fascinating instrument which most every American adult utilizes at some point or another. Useful for paying bills and transferring funds, their various features are not often considered by the typical consumer, even though they are all critically important to the way that they work. This article analyzes the way checks are read, by MICR encoding, as well as the various components of a check.

magnetic ink character recognition - micr
Checks are actually read using a character recognizing technology. This is known as MICR, or Magnetic Ink Character Recognition. In the printing of these particular characters on the bottom of a check, banking computers are capable of reading and understanding various pieces of data, including account numbers. The main difference between MICR codes and bar codes lies in the fact that MICR codes are simply able to be comprehended by people, as well as computers.

These MICR codes are generally printed on a check face utilizing specially designed type faces via a toner, or occasionally a magnetic ink. MICR characters are actually read by computers in a several step process. First, the machines magnetize the given characters from the check. After this, the type is moved over a MICR reading head. When each printed character moves across the head, it creates a singular form of wave which the system is capable of understanding. The benefit to such magnetic printing lies in the fact that these printed characters are easily and dependably interpreted no matter the interference, whether or not they have been overwritten or even faded by intervening marks. This leads to the extremely high accuracy read rate of greater than ninety-nine percent.

There are a number of other parts of a check, besides the MICR coding. These are mostly easily explained and understood. They include the customer’s information, the banking institution’s information, the routing number, account number, check number, the signature line, the over signature area, and the dollar box.

On the top left part of the check is found the customer’s information. This typically comprises of the individuals’ name, as well as his or her address and phone number. Although a phone number is not required, it is often requested by a business or party who accepts a customer’s check, so it is generally included on checks when they are printed.

Below the customer information, in the center left of the check, the banking institution’s information is printed. This information must be on every check, and it should be accurate. Information contained here includes the bank’s name, often their address, as well as their city, state, and zip code. It is critical that this information on a check be correct.

The routing number is the nine digit number located to the bottom left of the check, below the banking institution’s information. These numbers are easily identified, since they always begin with either zero, one, two, or three. They are useful for being unique to the banking institution printed on the check in the banking institution information section.

To the right of the routing number, usually immediately adjacent to it, lies the customer’s account number. These can vary in length and composition. They are always six digits or longer. A customer account number is unique to the individual within his or her banking institution.

Immediately to the right of the customer account number is the specific check’s number. This identifies which check in particular is being used for the transaction. It is always a sequential number, and is always located in two different places on the check, here and in the upper right hand corner.

Just above the check number is the signature box. Here a customer signs his or her particular check. Without a valid signature from the account holding and authorized customer, the check is invalid and not permitted to be either cashed or deposited.

As its name implies, the over signature area is located immediately above the customer’s signature line. Here there is room for a customer message, or a pre-printed message from the maker of the check. This is actually the least critical part of the various elements of the check, since it is not at all required.

Right above the over signature area is the dollar box. In the dollar box, a customer writes the dollar and cents amount for which he or she wishes to make the check. This is always done in numerical fashion in this location. To the left of the dollar box is a line where the customer may also write out in words the exact amount dollar and cents amount of the check.