Xerox DOCUPRINT 65, DOCUPRINT 115, DOCUPRINT 75MX, DOCUPRINT 155MX, DOCUPRINT 115MX User Manual
...
Generic MICR
Fundamentals Guide
701P22140
January 2003
Xerox Corporation
701 S. Aviation Boulevard
El Segundo, CA 90245
©2002, 2003 by Xerox Corporation. All rights reserved.
Copyright protection claimed includes all forms and matters of copyrightable
material and information now allowed by statutory or judicial law or hereinafter
granted, including without limitation, material generated from the software
programs which are displayed on the screen, such as icons, screen displays,
looks, etc.
Printed in the United States of America.
Publication number: 701P22140
Xerox® and all Xerox products mentioned in this publication are trademarks of
Xerox Corporation. Other products and trademarks of other companies,
including Dataglyph™, are also acknowledged.
Changes are periodically made to this document. Changes, technical
inaccuracies, and typographic errors will be corrected in subsequent editions.
Table of contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
About this guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ix
How to use this guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
1. Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1-1
A brief history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2
Why MICR? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5
Check printing capabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-5
Check processing procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6
Production cycle of a check . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-9
Changes in check creation role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-11
2. Environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-1
Types of MICR applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1
Manufacturing checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1
Issuing checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2
Issuing turnaround documents . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2
Printing financial forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3
Xerox MICR printing systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3
MICR printing technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4
Printer technical optimization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Typical MICR printing concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
3. Paper facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3-1
Paper guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1
MICR paper requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Basis weight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Sheffield smoothness scale . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-3
Grain direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4
Moisture content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5
Reflectance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-5
Curl . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-6
Perforation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-6
Metallic content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Stiffness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Cutting precision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8
Xerox paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8
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Table of contents
Paper maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9
Wrapping factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9
Storage factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9
Temperature and humidity conditions . . . . . . . . . . . . . . . . . . . 3-10
Paper runability criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11
Preprinted forms considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13
Inks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-13
Security features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-14
Duplication detection . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-14
Alteration prevention . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15
Application design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15
Numbered stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15
Features to avoid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-16
4. Document design. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4-1
Check document content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1
Security features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1
Background printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2
Fixed information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2
Date line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2
Amount lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3
Payee line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3
Signature lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4
Name of financial institution . . . . . . . . . . . . . . . . . . . . . . . 4-4
Memo line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4
Account title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4
Check serial number . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5
Fractional routing number . . . . . . . . . . . . . . . . . . . . . . . . 4-5
MICR line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5
MICR line (clear band) format requirements . . . . . . . . . . . . . . . . . . . . . 4-5
Format specifications using E13B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7
E13B character set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7
E13B numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7
E13B symbols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7
On-Us symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-7
Transit symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
Amount symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
Dash symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
E13B character design . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9
Field formats—E13B font . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-9
Document Specifications form . . . . . . . . . . . . . . . . . . . . 4-11
Amount field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13
On-Us field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13
Transit field . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-13
External processing code (EPC) field . . . . . . . . . . . . . . 4-14
Auxiliary On-Us field . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-14
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Field formats summary . . . . . . . . . . . . . . . . . . . . . . . . . 4-14
Character alignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16
CMC7 font . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16
CMC7 numbers and symbols . . . . . . . . . . . . . . . . . . . . . . . . . . 4-16
Character design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-18
MICR character spacing requirements . . . . . . . . . . . . . . . . . . . . . . . . 4-19
Character spacing algorithm for 300 dpi . . . . . . . . . . . . . . . . . . 4-19
Fixed pitch and proportional font spacing . . . . . . . . . . . . . . . . . 4-19
Check size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-23
Other application considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25
Two sided printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25
Perforations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25
Multiple-up printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-25
Readability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-27
5. Document processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5-1
Proofing checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2
Amount determination errors . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2
Proofing equipment errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2
Reader sorter function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-3
Waveform generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-4
Types of reader sorters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5
Waveform reader sorters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5
Matrix or AC reader sorters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5
Optical reader sorters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6
Dual read magnetic reader sorters . . . . . . . . . . . . . . . . . . . . . . . 5-6
Hybrid magnetic and optical reader sorters . . . . . . . . . . . . . . . . 5-7
Processing speeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-7
Paper handling by reader sorters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
Hopper jogger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
Separator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
Aligner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9
Read/write heads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-9
Item numbering and endorsing stations . . . . . . . . . . . . . . . . . . . 5-9
Microfilm or image capture unit . . . . . . . . . . . . . . . . . . . . . . . . . 5-9
Sorter pockets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10
Reject repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-10
6. Quality control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-1
Print quality specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1
Optical tools used to check MICR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2
MICR Gauge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2
Small Optical Comparator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3
Magnetic testing equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3
E13B calibration document . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-4
Testing sample documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-5
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Table of contents
Specifications for testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6
Operational maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22
Quality measurements: magnetic versus optical . . . . . . . . . . . . . . . . . 6-23
Horizontal position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-6
Vertical position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7
Skew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-9
Character-to-character spacing . . . . . . . . . . . . . . . . . . . . . . . . 6-11
Voids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-13
Extraneous ink spots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-14
Signal strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-17
Debossment and embossment . . . . . . . . . . . . . . . . . . . . . . . . . 6-20
Summary of ANSI standards . . . . . . . . . . . . . . . . . . . . . . . . . . 6-21
Additional perform ance considerations . . . . . . . . . . . . . . . . . . 6-22
Dry ink slivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22
Damaged or ragged characters . . . . . . . . . . . . . . . . . . . 6-22
Crayoning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-22
Magnetic testing equipment usage . . . . . . . . . . . . . . . . . . . . . . 6-23
Optical testing equipment usage . . . . . . . . . . . . . . . . . . . . . . . 6-25
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-26
7. Problem solving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1
When problem solving is required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1
New accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1
Existing applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1
Possible misinterpret ati o ns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2
Problem solving process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2
Determining the problem source . . . . . . . . . . . . . . . . . . . . . . . . 7-4
Reader sorter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4
Printer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4
Operator training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-4
Application software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-5
Unknown cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-5
Reader sorter testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-5
Interpreting test results . . . . . . . . . . . . . . . . . . . . . . . . . . 7-6
Questions to consider . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-7
Expected reject rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-9
Reducing reject rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-9
Inspecting documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-12
Correct font placement or format . . . . . . . . . . . . . . . . . . 7-12
MICR character defects . . . . . . . . . . . . . . . . . . . . . . . . . 7-12
Document damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-13
Excessive ink smears . . . . . . . . . . . . . . . . . . . . . . . . . . 7-13
Paper size and characteristics . . . . . . . . . . . . . . . . . . . . 7-13
MICR line format . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-13
Job history or results . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-14
Compare the documents with previous samples . . . . . . 7-14
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Analyzing reader sorter printout . . . . . . . . . . . . . . . . . . . . . . . . 7-14
Test patterns: alternative to reader sorter testing . . . . . . . . . . . 7-15
Verifying problem resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-16
8. Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8-1
Xerox printing systems security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1
Physical security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2
Restricting physical access . . . . . . . . . . . . . . . . . . . . . . . 8-2
Securing paper stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3
Storage and disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3
Responsible presence . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4
Software security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4
Logon levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4
Memory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-4
System commands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-5
Audit control processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-5
Accounting information . . . . . . . . . . . . . . . . . . . . . . . . . . 8-5
Paper jams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-5
Samples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-6
Tampering methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-7
Chemical tampering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-7
Mechanical tampering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-7
Modifying printed checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8
Lithographic printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8
Impact printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-8
Cold pressure fix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
Xerography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
Preventing tampering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-10
Safety papers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-11
Overprints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-11
Textures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-11
Amount limit statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-12
Amount in Words fields . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-12
Preventing check duplication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-12
Microprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-13
Watermarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-13
Drop-out print . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-13
Dataglyph™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-14
VOID pantograph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-14
Avoiding counterfeit and stolen checks . . . . . . . . . . . . . . . . . . . . . . . . 8-14
Alteration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-14
Embezzlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-15
Stolen checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-16
Counterfeits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-16
Cost considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-17
Generic MICR Fundamentals Guide vii
Table of contents
A. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Standards documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Instructions for ordering U. S. standards . . . . . . . . . . . . . . . . . . . . . . . . A-2
Ordering online . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Ordering hardcopy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
Standards development process information (U. S. only) . . . . . A-3
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Glossary-1
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Index-1
viii Generic MICR Fundamentals Guide
About this guide
Introduction
The purpose of the Gene ric MICR Fundamentals Guide is to
provide a reference for the various facets of the MICR
environment within the context of the Xerox MICR printing
products. This document does not contain specific information
on individual Xerox MICR printers.
Since the printing of MICR documents involves application and
operational considerations not normally associated with any of
the standard Xerox pr inting systems, this document provides
principles and guidelines to ensure successful MICR printing.
This document has been developed with the assumption that
readers have knowledge of standard Xerox printing systems
products, and the skills to develop applications and job source
libraries.
The Generic MICR Fundamentals Guide contains the following
chapters and appendices:
Chapter 1: Overview. Describes MICR, its historical
background, and the printing and processing procedures for the
MICR document.
Chapter 2: Environment. Examines the types of applications
that use MICR, trends within the industry, and typical MICR
printing methods and concerns.
Chapter 3: Paper facts. Identifies paper grades and properties
required for MICR printing , and describes paper maintenance
procedures.
Chapter 4: Document design. Describes the standard format,
features, and requirements of a check document.
Chapter 5: Document processing. Examines the common
types of reader sorter technology and the way these systems
function.
Generic MICR Fundamentals Guide ix
Introduction
Chapter 6: Quality control. D escribes MICR document print
quality specifications, the tools available to determine if a
document is within specifications, and general operator
maintenance procedures.
Chapter 7: Problem solving. Provides information on
identifying MICR printer related problems and using rejection
rate information to isolate the problem source.
Chapter 8: Security. Provides an overview of the security
procedures used to control and audit access to a Xerox MICR
printing system and to check printing functions.
Appendix A: MICR references. Lists the domestic and
international standards documents that apply to MICR
publications. Also contains a list of Xerox documents containing
MICR information.
Glossary: Lists terms and definitions related to MICR printing
and banking envi ro nm en ts.
How to use this guide
• First, become thoroughly familiar with the operation of your
• Read through this guide to acquaint yourself with all of the
• As needed, ref er to sections of th is guid e that are p ertinent to
own MICR system.
topics.
your work.
x Generic MICR Fundamentals Guide
1. Overview
MICR (Magnetic Ink Character Recognition) is a process by
which documents are printed using magnetic ink and special
fonts to cre ate ma chin e reada b le in f ormation f or quick document
processing.
Although traditionally MICR has been used to print accou nting
and routing information on bank checks and other negotiable
documents, the magnetic encoding lends itself to any form of
document processing.
The following figure shows a check with a MICR line. This line
contains block-shaped numbers running along the bottom of the
check, and non-numeric characters called “symbols.” This entire
string of numbers and symbols is printed using magnetic ink.
Figure 1-1. MICR line on a check
Generic MICR Fundamentals Guide 1-1
Overview
A brief history
Originally, checks were processed manually. However, by the
mid-1940s the banking system became inu ndate d wit h pape r as
society grew more mobile and affluent. Finding a means of
handling the growing number of paper documents became vital
to bankers. The banking and electronics industries searched for
a standard process that could be used in all banks throughout
the country.
In the mid-1950s, the first automated processing of checks was
initiated. The system that is now kno wn as MICR was developed
by the Stanford Research Institute, using equipment designed by
the General Electric Computer Laboratory. The E13B MICR font
was also developed.
The specifications for producing the E13B font using magnetic
ink were accepted as a standard by the American Bankers
Association (ABA) in 1958. In April 1959, the ABA issued
Publicat ion 147, The Common Machine Language for
Mechanized Check Handling.
Deluxe Check Printers had the task of translating the
specifications in to a wo rking pr oce ss. By the end of 1959,
Deluxe successfully produced checks using magnetic ink.
In countries throughout the world there are groups that s et
standards and di ctate the design specifications for document
encoding, processing equipment, and quality criteria for MICR
printing. Some of these are:
• American Banking Association (ABA)
• American National Standards Institute (ANSI)
• United Kingdom—Association for Payment Clearing Services
(APACS)
• Canadian Payments Associa ti on (CPA)
• Australian Bankers Association (ABA)
• International Organization for Standardization (ISO)
• France—L'Association Francaise de Normalisation
1-2 Generic MICR Fundamentals Guide
Overview
In 1963, the American National Standards Institute (ANSI)
accepted the ABA specifications, with minor revisions, as the
American standard for MICR printing. The ANSI publication
covering th ese st an dar d s is Print Specifications for Magnetic Ink
Character Recognition, first issued in 1969. Although compliance
with the standards is voluntary in the U. S., the banking industry
considers them to be the definitive basis for determining
acceptable quality of a MICR document.
Another MICR font, called CMC7, was developed by the French
computer company Machines Bull and has been the official
French standard since September 1964. The CMC7 font is also
used in other co untries, includ ing Italy, Spain, and Brazil. Like the
E13B font, CMC7 is a magnetically readable font, but with a
different character design and recognition criteria.
Some countries also use OCR-A or OCR-B, which are optically
read check processing fonts. These fonts do not need to be
printed with magnetic ink in order to be processed. The following
table show s which countrie s use the four check printing fonts.
Generic MICR Fundamentals Guide 1-3
Overview
Country E13B CMC7 OCR-A OCR-B
North America:
USA X
Canada X
Central America
Bermuda X
Mexico X
Panama X
South America:
Argentina X
Brazil X
Chile X
Columbia X
Ecuador X
Peru X
Uruguay X
Venezuela X
Europe:
Austria X
Belgium X X
Denmark X X
Finland X X
France X
Germany X
Holland X X
Italy X X
Norway X X
Spain X
Sweden X X
United Kingdom X X
Middle East and Africa:
Israel X
South Africa X
Far East:
Australia X
Hong Kong X
India X
Japan X X
Kuala Lumur X
Malaysia X
New Zealand X
Philippines X
Singapore X
Taiwan X
Thailand X
1-4 Generic MICR Fundamentals Guide
Why MICR?
Overview
Recognizing significant market value in combining the
advantage s of electronic la ser xerog raph y with MICR t echnolog y,
Xerox initiated investigations in late 1979 and early 1980. Early
efforts at the Xerox Webster Research Center concentrated on
basic material physics. The objective was to provide a
xerog raphic dry ink and de v eloper that wou ld produce high visual
quality images that could be read using the standard banking
reader sorter equipment.
Xerox’s MICR printing products combine the following:
• A modified xerograph ic engine
• A unique magnetic materials package
• The standard ANSI and ISO MICR character sets
The Xerox MICR systems meet ANSI, CPA, and ISO
specifications for automatic check handling.
MICR was chosen by th e ABA beca use it can be read accur ately
by machine, it uses existing printing technology, and the printed
documents are durable to withstand mutilation.
A MICR encoded document can be read through overstamping,
pen and pencil marks, oils and greases, and carbon smudges.
However, MICR printing is one of the most quality-conscious
application areas within the printing industry. It meets ABA
security requirements for negotiable documents. MICR is the
only system that produces reliable results at high processing
speed.
Check printing capabilities
A Xerox MICR printing system with a magnetic material package
and MICR fonts can print a character line at the bottom of a
check form that is machine read able by standard banking re ader
sorter equipment. On blank security paper, the Xerox MICR
printing system can produce the entire check image, including
the form, all fixed and variable data, logos and signatures, and
the MICR line, in a single pass.
Generic MICR Fundamentals Guide 1-5
Overview
The printing process is one small part of the total processing
procedure for a MICR printing system user . Quality and accura cy
of the check documents must be closely controlled during
printing to prevent problems from occurrin g when the documen t
is processed off-site.
Check processing procedure
All checks impact at least three parties:
• The person who writes the check
• The person to wh om the check is being pai d
• The bank at which the check writer has an account
Depending on where and by whom the check is deposited, how
the check is processed, and how the check is handled for funds
clearance, many different parties can handle the same check.
Fraud can occur at any of the steps or access points in this
process.
The following steps, illustrated in figure 1-2, trace a document
through a series of corporate and banking system procedures
typical of the MICR environment.
1-6 Generic MICR Fundamentals Guide
Overview
Figure 1-2. Life cycle of a check
Generic MICR Fundamentals Guide 1-7
Overview
1. The check printer (1) produces a blank check that will be
completed later. This check includes the static data that is
needed for a negotiable document:
• Financial institution name and address, issuer name and
address, che ck form, company logo, etc.
• The MICR line, containing the account and routing
information that is needed to process the check
• Other audit, account, and report information as required
by the customer
2. The customer (2) adds the transaction information—payee,
amount, and date—and authorizes the funds transfer with a
signature.
NOTE: When using a MICR laser printer, steps 1 and 2 may
happen simultaneously.
3. The completed check is transferred to the payee (3), who
deposits it in the bank of fir st deposit (BOFD). The pa y ee may
receive the check in person, by mail, or through a third party.
A third party check may require a second endorsement.
4. Deposits (4) are mad e in se v er al ways: through a teller, u sing
an automated teller machine (ATM), us ing a drop box, or
through a postal lock box. Deposited items are accompanied
by a deposit ticket that lists and totals the items and identifies
the payee account.
This is the entry point for the automated payment processing
system.
5. The BOFD encodes the amou nt of the chec k in the MICR line
(5) and balances the check against the deposit ticket to verify
that the correct amount is being credited to the payee
account (proof of deposit) .
6. MICR documents that are printed on a Xerox MICR printing
system are usually corporate paychecks, stock dividend
checks, etc. After printing, these type of documents require
additional processing using a high-speed device called a
“reader sorter .” The r e ade r sorter identifie s ea ch m ag ne ti z e d
character and symbol of the MICR line using logical analysis
algorithms of the electronic wave patterns that the characters
produce.
In the “capture pass,” checks are read in a reader sorter for
the first time (6). At this time, they are sorted into checks
drawn on the BOFD, known as “On-us items” (8), an d chec ks
drawn on other banks.
1-8 Generic MICR Fundamentals Guide
Overview
7. Checks drawn on other banks are sent to the payor bank
through a clearing (7) arrangement. The check may be
cleared through the Federal Reserve, a correspondent bank,
a clearing house, or directly by the issuing bank.
The payor bank also balances the check against the deposit
ticket (proof of deposit) (7a) to verify the check amount, and
performs its capture pass (7b) on the reader sorter in order to
identify the issuer account (7c). (Refer to the “Proofing
checks” section of chapter 5 f or more information on this part
of the process.)
8. In most cases, the check is debited from the issuer account
and moved to bulk filing (8), where it is stored until time for
monthly statement rendering.
Fro m this point f orward, an On-Us item is treated the same as
one that was cleared to anothe r bank.
Two exceptions may occur:
• If the payor bank does not honor the check, it is returned
(9) through the BOFD to the payee. The amount is then
deducted fr om the payee account.
• During reconciliation, the account holder may discover a
discrepancy (10) between its records and those of the
bank. Their bank then researches any discrepancies.
NOTE: Account holders may contract with their banks to
perform reconc ili at i on before clearing the check.
Production cycle of a check
The check production process starts as soon as the need is
identified. Design requirements shou l d co mp re he nd purchasing,
distribution, warehousing, manufacturing, internal and external
processing requirements, and the needs of the check issuer.
Banks frequently require new corporate accounts to submit
checks for approval before the banks approve the account.
The following steps, illustrated in figure 1-4, describe the typical
process that is required before the first negotiable checks are
delivered to the payee.
Generic MICR Fundamentals Guide 1-9
Overview
Figure 1-3. Check ordering and production cycle
1. Design requirements are defined for a new account.
2. Requirements are passed to application development.
3. Samples pass internal quality checks.
4. Samples are forwarded to the bank for approval.
5. Any problems are referred to application developers, who
ensure that th e problems cannot occur in production.
6. After approval by the bank, the check design becomes
available for routine production.
7. Variable check data is prepared for incorporation.
8. The checks are printed.
9. The printed checks are inspected.
10.Any problems are repo rted to the source f o r cor r ection and
reprinting.
11.When they have pa ssed ban k validation and quality
inspection by the issuer, the checks are issued to the payee.
1-10 Generic MICR Funda m entals Guide
Changes in check creation role
In the past, the roles of manufacturer and check issuer were
distinct. Because the technical requirements of doing MICR
printing were f airly diffi cult, the man uf acturer usuall y did all of the
process steps that involved the generation of the check, except
for entering the amount, date, and payee.
The introduction of MICR impact printers allowed the check
issuer to sometimes take over printing the MICR line. With
further technological adv ances , such as t he Xero x MIC R printing
systems, the check issuer has assumed still more
responsibilities that previously belonged to the manufacturer.
- - - - - Printing functions - - - - -
Overview
Manufacturer
Check
issuer
Old areas of
responsibility
Background
Manufacturer
Form and border
MICR line and serial number
Check
issuer
Amount and payee
New areas of
responsibility
Figure 1-4. Changes in check creation roles
Because MICR documents are typically negotiable documents,
every possible measure must be taken to ensure successful
processing. With a less clear division between check
manufacturer and check issuer responsibilities, the check issuer
becomes more involved in the development of a new check
issuance application.
Generic MICR Fundamentals Guide 1-11
Overview
1-12 Generic MICR Funda m entals Guide
2. Environment
Checks and other bank forms constitute the most frequent uses
of MICR printing. All businesses issue checks to meet payroll
and accounts payable obligations. In addition, all profitable
publicly owned businesses make periodic stock dividend
distributions by chec k.
Most medium and small companies buy check production
services from a service bureau or a bank. Individuals who once
obtained personal checks through their banks can now buy
checks through the mail from check printers.
A major trend in the banking industry is check truncation.
Truncation refers to the ability of the bank of first deposit to
process MICR documents, both theirs a nd those belonging to
other banks, without further transfers of the paper document
(check). The check is processed electronically. This reduces
cost and improves check clearance.
Types of MICR applications
A MICR system need not be dedicated to chec k printing or to any
other MICR-specific application. A MICR system operates no
differently from an identical system that does not have MICR.
MICR and non-MICR systems ma y be mixed at a site and do not
impact scheduling of jobs that do not require MICR magnetic
materials.
MICR printing is most frequently used for the following types of
applications.
Manufacturing checks
Check manufacturing refers to the process of converting milled
paper into finished check and deposit books, computer
stationery, etc. This is usually done by a small group of specialty
or security printers, mail order check printers, and others. MICR
printing systems are becoming more popular in this market.
Generic MICR Fundamentals Guide 2-1
Environment
Issuing checks
Issuing turnaround documents
The most common use of MICR printing systems is the process
of obtaining check stationery from the manufacturer and
encoding it with MICR information. Most businesses regularly
issue checks in at least two of the following categories.
• Payroll checks
• Accounts payable checks
• Dividend checks
• Benefit checks
•Drafts
•Warrants
• Negotiab l e or de rs of wit h drawal
Turnaround documents refer to any type of volume transaction,
whether negotia ble or not, that requires data capture. Familiar
examples of turnaround docum en ts are :
• Credit card invoices
• Insurance payment booklets
• Instant re bate coupons
Turnaround document s are also used in remittance processing,
which is a procedure for handling items returned with a payment.
MICR encoded tu rnaround documents enable organizations to
cut their resource and equipment costs. For example:
1. A bank card compan y MICR enco de s an accou nt number on
the bill and remittance slip that is sent to the customer.
2. The payment is returned with the remittance slip. When the
bank card company receives the check and payment slip, the
two documents are visually checked to see that the amounts
are the same on both.
3. The documents are processed by a MICR reader sorter,
which reads magnetic ink characters.
2-2 Generic MICR Fundamentals Guide
Printing financial forms
MICR is also used for printing a variety of financial forms.
Examples of MICR financial forms include:
• Personal checkbooks
• Limited transaction checks, such as money market checks
• Direct mail promotional coupons
• Credit remittance instruments
• Internal bank control documents, such as batch tickets
Xerox MICR printing systems
The Xerox MICR printing systems are a unique range of
products that combine speed, intelligence, and high print quality.
They also provide great flexibility in font selectivity, graphics
capability, and dynamic page f ormatting .
Environment
An advantage to Xerox printing systems is their ability to print a
document in a si ngle pass, as shown in the following figure. The
form design, variable data, logos, and signatures can all be
printed together. With MICR enablement, the MICR line can be
included.
Additional benefits incl ud e:
• The elimination of expensive production and inventory of preprinted forms
• The ability to produce multiple checks on one physical page
• Reduced handling steps by using cut sheet rather than
fanfold paper
• The reduction of additional equipment, such as burste rs,
decollators, trimmers, and signature machines
• Reduced turnaround time
• Ability to print checks against multiple accounts
With the introduction of the latest MICR printing systems, Xerox
has expanded its application base, using more paper sizes and
multiple paper stocks.
Generic MICR Fundamentals Guide 2-3
Environment
MICR printing technologies
The following basic printing techniques are capable of
generating magnet ic characters:
• Letterpress
Letterpress is based upon a raised typeface that sits above
the plane of the image carrier. The typeface is inked with
special magnetic ink and applied to the paper under
pressure. Common forms of letterpress are: hot metal type,
sequential number machines, and ribbon encoders.
• Offset lithography
Large offset devices are typically used to produce check
stationery. The lithographic process uses magnetic ink and
water to shap e the image on a plate . The i mage is tran sf erred
to a rubber sheet called a blanket. The image is then “offset”
to the paper.
• Impact ribbon encoding
Ribbon encodin g, al so ca l led “ d ir e c t prin ti ng ,” i s a le tterpress
technology with a different delivery method. Instead of the ink
being applied to the typeface and then to the paper, the ink is
suspended on a thin sheet of backing (usually a polymer
base) called a ribbon.
The ribbon is held between the typeface medium (drum,
daisy wheel, or hammer) and the pap er, so that when the
typeface is struck against the paper, the components on the
ribbon are trapped and pressed onto the document to be
printed.
• Non-impact (xerography and ionography)
Non-impact printing technologies have been growing in
market penetration. They require highly sophisticated and
consistent equipment utilizing magnetic materials.
• Thermal ribbon encoding
A non-impact, thermal transfer version of ribbon encoding
combines some of the charac terist ics of the conventi o nal
ribbon encoding with those of non-impact technology.
2-4 Generic MICR Fundamentals Guide
Printer technical optimization
The Xerox MICR systems use the same operating software as
their standard configuration counterparts. In addition, the MICR
systems have been enhanced to include the following features:
• Optimized print engine
• MICR materia l s package
• Optimized paper handling system
• Digitized MICR font
Optimization of the MICR print engines subsystem is required b y
the physical properties of the dry ink. As a result of these
changes, dry ink and de v eloper a re not intercha ngeable between
MICR and non-MICR printers, unless specifically designed to
accept more than one type of materials.
The Xerox MICR systems have a paper handling system
designed for the highly accurate registration. This is required for
precise placement of the MICR line t o maximize readability
during check processing.
Environment
Typical MICR printing concerns
The following areas of MICR user concerns have made banks
want to increas e reli ab ili ty of the MIC R docum en t gene r a ti ng
process:
• Security: This can be addressed by providin g high security
within the document creation process. In addit ion,
counterf ei t in g can be reduced by the use of v a rious des ig n
and production technique s.
• Quality: Sensitive to the banking industry demands, printing
businesses maintain tight quality control procedures.
• Production speed
• Cost
In addition to their need to adhere to required print quality
standards, they have the following concerns about the pr inting
operation:
• Traditional MICR printing devices are labor intensive.
Generic MICR Fundamentals Guide 2-5
Environment
• High security measures are needed in any environment that
uses check stationery. These measures affect physical
access restrictions and staff supervision.
• Check printing usually requires frequent starting and
stopping, which is time-consuming and degrades print speed.
• Storing hundreds of different preprinted check and deposit
forms can be costly.
• Short print runs of continuous forms can waste materials.
• Check production requires short lead times.
Xerox MICR printing systems reduce many of these concerns.
There is no need to store dif f erent type s of preprinted f o rms, and
single pass printing eliminates many time constraint s.
2-6 Generic MICR Fundamentals Guide
Paper guidelines
3. Paper facts
MICR applicatio ns have special pa per, print, and finishing
requirements . Ref e r to y our printer ope rato r guid e f or a co mplete
list of supplies and options.
Refer to Helpful Facts about Paper for information on solving
printer problems relating to paper.
The paper that you use to print MICR documents must meet the
criteria for the Xerox MICR laser printer and the specifications
imposed by MICR industry standards. In addition, papers must
resist alteration and prevent duplication of negotiable
documents. They must support hi gh print quality and feed
through the printers properly.
NOTE: Some b ankin g a uth oritie s spe cify the type and weight o f
paper that should be used for check printing in that country. It is
essential that only the specified paper be used.
Follow these guidelines for best results:
• Understand check stock security requirements, and use
security features that do not degrade printer performance.
• Do not accept delivery of paper or forms that are not reamwrapped in a moisture barrier.
• Do not open paper reams until you are ready to load the
paper into the printer.
• Store paper in the printer room for at least 24 hours before
using it. This allows the paper to stabilize to the temperature
and relative humidity of the room.
• Do not allow the printer room t o become e xcessive ly humid or
dry. This can cause a differ en ce i n moi stu re content between
the edges and center of each s heet of paper, and result in
feeding, image permanence, or image deletion problems.
Generic MICR Fundamentals Guide 3-1
Paper facts
• Do not use cut-sheet check paper that was converted from
fanfold by the paper distributor. This conversion process can
result in dimensional inaccuracy, poorly cut edges, and
unacceptable paper curl.
MICR paper requirements
The following table summarizes Xerox’s recommendations for
papers that are use d f or MI CR printing. P ap ers with the f ollo win g
characteristics perform best in Xerox MICR printers.
Table 3-1. Xerox paper recommendations
Paper characteristics Recommended for optimal printer and reader/sorter performance
Basis weight 24-pound/90 gsm
Sheffield smoothness 80 to 150
Grain direction Parallel to the long edge of check or MICR document. Short grain direction
may be acceptable for personal, 6 inch/152 mm checks.
Moisture content 3.9 to 5.e per cent
Reflectance 60 percent minimum
Curl Refer to instructions in your MICR printing system operator guide
Perforations 60 to 80 ties per inch
Metallic content No ferromagnetic materials can be present in the paper.
Stiffness For recommendations, refer to “Paper stiffness,” later in this chapter.
Cutting precision +/- 0.030 inch/0.762 mm length
+/- 0.030 inch/0.762 mm width
Coating Do not use paper containing clay or resin coatings.
Lamination Do not use stock that is a combination of paper and plastic.
Preprinting ink Must be heat resistant to approximately 400 degrees F/204 degrees C for laser
printing. Heat resistance varies according to manufacturer.
Size Refer to instructions in your MICR printing system operator guide
Basis weight
Basis weight is an industry term for expressing the weight per
unit area of paper . P aper weig ht is generally e xpressed as g rams
per square meter (gsm), a measure that makes it easy to
compare any two pieces of paper, even if the papers are of
different types, such as offset and index.
3-2 Generic MICR Fundamentals Guide
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