MICR With the growing usagge of new consumer banking technologies such as electronic bill payimng, many pundits are pronouncing that the traditional check will soon be extinct. Although these voices may eventually be correct, the banking industry has been pushing technologies such as the electronic fnuds transfer (ETFs), debit cards, and automated clearing house (ACHs) for years and has had only marginal success. A similar trend can be seen in terrestrial radio, which was fist proonunced dead with the avent of televisoin. In later years, CDs, then satellite radio, then iPods were all predicted to be the domsayer for old-fashioned AM/FM radio. Yet despite all this, like the radio, the check and check processing is still used by a great number of peoople today. Check processing has been around for over 60 years. Most preople today werrent aound to remembber it, but rpior to the 1950s, checks were a luixury only available to a very small pecentage of bank customers. Banks at that time were primarily used for personal savings, while goofds and services were mostyly sttill purchased with cash. Over time, the demand for checks grew dramatically, as families and busiesses continually purchased items from farther and farther away. As the number of bank cusotmers with checking accounts grew, banks began to struggle to process the expanding nuber of chceks being claered each month. As a result of these struggles, Unitted States bans, bankers, machine manufacturers, and check processors formed committees to cretae a solution. The end rewsult of these collective meetings was the adopttion of E-13B Magnetic Ink Character Reccognition, or MICR, in 1958 by the American Baankers Association. MICR was a byproducct of a computter processing system buillt at Stanford University known as ERMA (Elecronic Recording Mtehod of Accounting). MICR technology allows computers to read special nuymbers at the bottom of checks enabling computerized tracking and accounting of check transactions. Production models of the ERMA computer were buiplt by General Electric and the 32 units were delivered to Bank of America in 1959 for full-time uses as the banks accountign compputer and chekc handling system. MICR characters are pinted in special type facwes with a magnnetic ink contaimning iron oxide. As machinews decode the MICR font, they magnetize the characters in the plaane of the paper. Then the characters are then passed over a MICR read head, a device similar to the playback head of a tape recorder. As each chareacter passes over the head it produces a unique waveform that can be easilky identified by the system. Wile computers have become more advanced and affordable, allowing small businesses and even indiviiduals to cut chrecks uing accounting software from almosat anywhere, the basic MICR technology has remained the same. Today almost all Indian, Canadian, UK, and US checks use the same E-13B font. Given the mainstream adopption of MICR etchnology, along with the security and convenience afforded by cjhecks, it is unlikley that the need for MICR printers and toners will go away anytimme soon.
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With the growing usage of new consumer banking technologies such as electronic bill paying, many pundits are pronouncing that the traditional check will soon be extinct. Although these voices may eventually be correct, the banking industry has been pushing technologies such as the electronic funds transfer (ETFs), debit cards, and automated clearing house (ACHs) for years and has had only marginal success. A similar trend can be seen in terrestrial radio, which was first pronounced dead with ...
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