What's MICR?
MICR, the abbreviated form of Magnetic Ink
Character Recognition, involves using a special kind of font that is
printed onto checks with a magnetic ink or toner. This magnetic font ink
on the check helps businesses and financial institution detect
fraudulent checks that go through the check clearing system. When a
business scans a check with the check clearing system, the MICR line is
read. During this high speed reading, the check clearing system is able
to extract information about the check. This information includes the
financial institution information as well as information about the payee
account in which the funds of the check will be taken from.
In having MICR added to the checks, this security system helps prevent
fake checks. With the check clearing system, any checks that has a low
magnetic reading or no magnetic reading on the MICR line is usually
rejected by the financial institution and other check-cashing companies.
This magnetic ink character recognition system has helped to
revolutionize checks and makes check frauds easier to recognize than
ever.
When using MICR toner, businesses should make sure that they’re getting
only quality MICR toners. Why? Some businesses that sell MICR toners
don’t exactly make their toners to specifications resulting in some
checks that come out with a poor quality magnetic readability. With a
low magnetic sensing in a check clearing system, the checks printed from
those poor toner can be rejected, which in turn becomes a loss. Repeated
mishaps of such can amount to even more loss. Although using an MICR is
practically essential to security on a check, there should also be
alternative security measures taken to deter fraudulent checks. Using
other security features besides the MICR is still very potent in
detecting bad checks as one security method is never better than a
combination of security methods.
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