The banking industry uses a special type of character-recognition technology that can be seen at the bottom of most checks. It is known as MICR encoding, and it allows for these financial documents to be easily read when they arrive at the clearing house. MICR fonts work in a similar way to barcodes, with one distinctive difference. Unlike barcodes, which are a series of lines and dots, MICR fonts are easily readable by humans. Although it seems like a simple form of technology on the surface, there is actually a lot more than what meets the eye.
Understanding the history of how checks were processed can help you to recognize the need for automation. Prior to the mid 1040s, all checks were sorted and processed by hand. This was a very time consuming process, especially as the number of checks that cleared continued to increase. In the 50s, new standards were initiated to help bring the banking industry into a more uniform state. This included the development of the first MICR font (E13B). This font was later set as the standard by the American Bankers Association (ABA), and the first checks began to be printed in 1959.
MICR technology is not only used in the United States, there are many other counties that have adopted this technology as well, including the UK, Canada and Australia. (Source:http://en.wikipedia.org/wiki/Magnetic_ink_character_recognition). Another MICR font was also developed, the CMC-7 font, which was used in Italy, France and other European countries starting in 1957. Although the 2 different types of MICR fonts have the same objective, there are some differences between them. Here is an overview of their specifics.
E13B - This is the first MICR font and is widely used as the standard in most of the world. It was designed using a 0.013" grid, which is why it has the number 13 in the name. This font contains the decimal digits and additional symbols. The additional symbols are used to delimit the transaction amount, bank branch (routing number), customer account number and to separate parts of the numbers.
CMC-7 - The CMC-7 font is the latecomer, in comparison to the E13B MICR font. It is widely used as the standard in several European countries and was developed by Groupe Bull in 1957.
Although most countries have a standard, major lending institutions typically have both types of fonts available. Since they are printed, typically on a specialty printer, it is necessary to order the appropriate font kit to match the printer model.
One other thing that should be considered for MICR fonts and the printing of checks is security. Workplace security has become a hot-button issue in recent years. In fact, it is estimated that up to 75% of employees have stolen at work at least one time and up to half of them steal multiple times. (Source: http://www.hirepowerassociates.com/pdfs/StepOneSurveyII.pdf). Having the proper fonts and using other security equipment options can help to make this less likely to happen.
As the financial industry continues to grow and develop, it is difficult to know where it will land. The MICR font of today may just be history at some point in the future but for now, it is the standard by which we live.
Corey Rogan is the author of this article about different MICR fonts. Sources for this article can be found at http://www.troygroup.com/products/digital/index.aspx. Feel free to connect with him over at Google+.