Xerox DOCUPRINT 65, DOCUPRINT 115, DOCUPRINT 75MX, DOCUPRINT 155MX, DOCUPRINT 115MX User Manual

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Generic MICR Fundamentals Guide

701P22140 January 2003

Xerox Corporation 701 S. Aviation Boulevard El Segundo, CA 90245

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.

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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Table of conte nts

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

Generic MICR Fundamentals Guide v

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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Table of conte nts

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

Paper facts

In the United St ates, paper weights ar e given as the weight of 500 sheets of paper of a particular size. The size of the basis sheet, however , v aries with the type of paper. This makes difficult any comparison of weight between different types of paper. For example, 50 pound xerographic bond is not the same as a 50 pound offset pa per, and both are different from a 50 pound in dex stock.

Xerox MICR printing systems produce the best quality and highest throughput using the Xerox recommended 24 pound (U.S. market) or 90 gsm xero g raphic paper. Lighter papers often cause misfeeds, and heavier papers are more subject to jams (although most Xerox printing system s can handle a wide range of paper weights).

In multi-pass reader sorter processing, lighter weight papers subject to frequent misfeeds and mechanical stresses, and are not as reliable as 24 pound paper.

Sheffield smoothness scale

The smoothness of your paper can impact image quality. With increasing roughness, the print quality of solids and halftones degrades. Extremely rough paper does not properly accept fused dry ink, which rubs or flakes off.

Rough papers require a higher density setting and more ink than smooth papers to achieve the desired level of image darkness, because surface irregularities must be filled in with ink.

Papers must measure 50 to 200 when they are measured by a Sheffield smoothness instrument, in order to meet ANSI standards. Higher numbers indicate roug her paper.

Xerox has conducted extensive image quality testing on xerog r aphi c , bo nd, an d offset paper s . The smoot her xerographic and bond grade papers provide the best image quality. Xerox recommends a Sheffield smoothness of 80 to 150.

If you use preprinted forms, check with your forms supplier for the smoothness quality of the form before you make a bulk purchase.

Generic MICR Fundamentals Guide 3-3

Paper facts

Grain direction

Pape r prop erties are related to the g ra in di rect ion. The g r ain of a paper is the direction in which most of its fibers lie, as shown in the following figure. Long grain papers are cut so that the fibers are aligned with the long dimension of the cut sheet. Short grain papers have the fibers aligned with the short dimension of the sheet.

You can use 24 pound paper in either grain direction. If your paper is light er than 24 pound, use it only for document s in which the grain is in the long dimension of the finished document. For long grain MICR-processed documents, the minimum paper weight is 20 pounds.

NOTE: 24 pound, long grain paper is recommended for MICR printing.

Long grain sheet cut from paper web

Paper web - made during paper making process

The following figure shows the relationship between long and short grain documents and the MICR processing direction. The shaded areas represent typical documents that would be cut from these s heets for MICR processing.

Pulp fibers

Short grain sheet cut from paper web

Paper making

process direction

Figure 3-1. Long and short grain

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Paper facts

11" 11"

Moisture content

Too much moisture in paper causes excessive curl, jams, degraded image permanence, and print quality problems. Too little moisture causes static problems, which can lead to jams, misfeeds, and difficulties in post-processing paper handling.

Papers with a nominal moisture content of 4.7 per cent perform best in Xerox MICR laser printers. Offset and bond papers may have a higher moisture con tent than xerographic pape rs.

Xerox brand papers have a maximum moisture content of 5.3 percent, with an average of 4.7 per cent. Several other MICR bond papers have moisture content of less than 5.3 percent.

Preprinted papers must have a moisture content within these limits after preprinting.

8.5"

Figure 3-2. Long and short grain documents

Reflectance

All MICR materials must meet a background reflectance standard of 60 per cent minimum, as measured by equipment having a CIE Photopic Spectral Response. Backgrounds containing patterns, designs, logos, or scenes must meet additional limits on the contrast of the preprinted areas. These background reflectance standards were developed to permit machines to read information on the check, such as the convenience amount field.

Generic MICR Fundamentals Guide 3-5

Paper facts

Requirements for background reflectance are discussed in chapter 4, “Document design.”

Curl

All papers curl to some degree. Excessiv e curl is one of the most common causes of paper jams. Selecting a low-curl paper with the proper moisture conte nt mak es a signi fica nt difference in the productivity of your system. Refer to the operator guide for your printer for paper curl recommendations specific to your printer.

Because the front and bac k surf aces of th e paper, as determined during the paper making process, differ slightly in their makeup, one side is preferred as the side to image firs t. If you are using a quality 24 pound/90 gsm paper intended for xerographic purposes, the ream wrapper is marked with an arrow that indicates the preferred printing side. Print on this side for onesided printing. For two-sided printing, print on this side first (unless instructed otherwise in the operator guide for your laser printer).

Perforation

How you load preprinted paper is determined by the preprinting. Preprinted forms should be produced so that their curl is compatible with the requirements in your MICR printer operator guide.

When you use perforated paper, your objective is to have a smooth, free-feeding sheet that retains sufficient beam strength to prevent sheet fold-over, buckling, or jams.

If you use preperforated forms, consider the following fa ctors:

• Use 24 pound/90 gsm paper.

• Use a perforation that lets the sheets retain as much stiffness as possible. Reduced stiffness may result in jamming and paper mutilation.

• Perforations should be nine per inch.

• All holes should be the same size.

• The ratio of holes to paper (tie size) should be less than or equal to 1:1. In oth er w or d s, the tie size sh oul d be at l e ast a s large as the hole size.

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Paper facts

• If you are using micro-perf orati ons, be sur e to hav e more than 60 ties to the inch.

• Make sure that the perforation line is rolled sufficiently to eliminate the underside bulge (debossment). Otherwise, feeding and stacking may be unreliable and print deletions may occur.

• When paper is perforated, a ridge or dimple forms around the holes. Make sure that the design and placement of the perforation does not cause document edge irre gularities.

• Do not use puncture-type perforations that are not ironed smooth. They prevent the stack from lying flat, which can cause feeding problems and deletions. Use rolled perforations instead.

• Make sure that the perforation design and placement do not cause document edge irregularities.

• Make sure that die-cut perforated papers are free of paper dust and chaff.

• Avoid printing any text or forms data within 1/8 inch/3.2 mm of

• For printers that use edge registration: Full-length perforation

Metallic content

Paper stock materials for MICR applications cannot contain ferromagnetic particles.

Stiffness

Stiffness ref er s to th e rigidity or be ndi n g re si stan ce of the pa pe r. Thicker papers are usually stiffer. In general, 16 pound/60 gsm and lighter papers are not as stiff as heavier stocks. They may bunch up or wrinkle in the printer, causing jams and misfeeds. Heavier papers, such as cover and index stock, may jam more frequently and have more print quality defects (skips, blurs, and deletions) due to their reduced ability to bend.

any perforation.

that is parallel to the registration edge should not be closer than 1.5 inches/37.5 mm to that edge.

24 pound/90 gsm paper usually provides stiffness levels in the range needed by the Xerox MI CR la ser printer and the proofing, reader sorter, and remittance-processing systems used in banking environments.

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Paper facts

Stiffness is lower across the grain direction than in the grain direction. Documents having the grain r unning parallel to the short dimension of the pa per require special consideration to ensure adequate stiffness. Sh ort grain MI CR documents are restricted to papers with a basis weight of 24 pound/90 gsm or higher.

Cutting precision

Pape r for MICR printing applicatio ns sho uld be fr ee o f al l de f ect s that could interfere with reliable feeding, such as edge-padding and folded or bent she ets.

NOTE: Fan all paper before loading it.

The squareness of each sheet must be precisely controlled to ensure optimum MICR ba nd re gi stration. The dimensions must be controlled to ±.030 inch/0.762 mm.

Xero x paper

Papers that have been converted from continuous for m paper present a risk of jams and poorly registered forms in a Xerox MICR laser printer.

To ensure reliability, X erox has developed paper w i th the optimum characteristics for xerographic printing. Every lot of Xerox paper is tested at least three times:

1. At the mill by the manufacturer

2. In Xerox quality-assurance laboratories

3. In Xerox laser printing systems prior to shipment

Xerox 4024 Dual Purpose 24 pound paper is recommended for MICR printing in the U. S. and Canada. This paper has been extensively run on Xerox MICR laser printing systems. It closely complies with all MICR paper specifications and is suitable for printing MICR encoded documents that will be proces sed through high-speed reader sorters.

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Paper maintenance

Wrapping factors

Paper facts

The physical condition of your MICR paper is extremely important. In addition to being free from holes, wrinkles, tears, damaged edges, and foreign material, MICR paper must be carefully maintained, both before and after printing.

Paper with a moisture content below 5.5 per cent is best for a Xerox MICR laser printer. The moisture content must be uniform within the ream, which should not be allowed to lose or gain moisture duri ng storage.

To best preserve paper and pr eprinted f orms, use moistu re-proof ream wrappers, which maintain critical moisture balance.

Xerox paper is covered with a polyethylene laminate ream wrapper. This material is the most effective in resisting the transfer of moisture from the environment. Unlike wax laminate wrappers, polyethylene does not bleed through the paper covers when exposed to heat. Wax bleed-through can cause f e ed i ng problems. Discard the top and bottom sheets if you suspect wax contamination.

Storage factors

Xerox paper are packaged in protective heavyweight cartons, which you can reuse for storage. These cart ons are transported on a wooden pallet that provides uniform support and protection to the bottom layer of cartons. The cartons are protected with a moisture barrier of plastic shrink-wrapping.

Generic MICR Fundamentals Guide 3-9

Paper facts

Temperature and humidity conditions

The temperature and humidity in the printer environment can affect runability and print quality. Use the following guidelines for the best MICR printing performance:

• Optimum temperature and humidity range – 68 to 76 degrees F / 2 0 to 14 degrees C – 35 to 55 percent humidity. Store all paper on a wooden pallet. Placing paper directly on

the floor increases moisture absorption.

• If you move paper from a storage area to a location with a differen t t empe ratur e an d hum idit y, condition the paper to the new environment before using it. The time you should wait between paper storage and use is listed in the following table.

Table 3-2. Temperature conditioning chart

Temperature

difference 10° F 15° F 20° F 25° F 30° F 40° F 50° F

Number of boxes Hours Hours Hours Hours Hours Hours Hours

1 4 8 11 14 17 24 34

5 5 9 12 15 18 25 35 10 8 141822273851 20 11 16 23 28 35 38 67 40 14 19 26 32 38 54 75

For example, if you want to move 10 cartons (boxes) from your storage area at 55 degr ees F to you r printing room at 75 degrees F, (a change of 20 degrees), you should let the cartons stand unopen ed in your printing room for at least 18 hours before use.

• Store paper inside the original carton and ream wrappers until shortly before use.

• Reduce excessive curl by storing the paper in a dry environment for several days.

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Paper runability criteria

Use the f ol l owing criteria to a void paper jams and to assure high image quality:

• Use 24 pound/90 gsm xerographic or dual purpose MICR bond paper. The paper should have the following characteristics:

– Low moistur e cont en t (be lo w 5.3 per cent) – Built-in curl control – Smooth surface (smooth er than most offset or bond

– No mechanical defects – Moisture-proof wrapping

• Correct temperature and humidity are also important. Refer to the “Temperature and humidity conditions,” earlier in this chapter.

Paper facts

papers)

Your service representative can verify that the MICR printing system is adjusted within design tolerances. If a paper runability problem persists, consider changing:

• The ream, carton, or request paper from a different lot

• Your type, weight, or brand of paper

• The conditi ons under which the paper is stored

• The temperature or humidity of the printer environment

• The time elapsed between unwrapping and printing

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Paper facts

Malfunction Possible causes Repeated processor jams • Excessive curl

Paper multi-feeds or skew feeds • Poorly cut paper

The follo wing tab l e is a troub leshoo ting gui de f or pape r runability issues.

Table 3-3. Paper runability issues

• High moisture content in paper

• Excessive paper smoothness

• Bent corners

• Predrilled paper plugs

• Excessive moistu re in printer or paper storage environment

• Paper not acclimated to printer environment

• Wrapper wax or glue on sheets

• Low humidity in printer environment

• Poorly drilled paper

• Paper too porous

Paper misfeeds • Poorly cut paper

• Excessive curl

Jams in stacker bin • Excessive curl

• High moisture content in paper

• Excessive moistu re in printer or paper storage environment

Sheets stick together in stacker • Low humidity

• Paper dust on static eliminator

Poor copy quality • Rough paper

• Incorrect paper conductivity

Leading edge of the paper tears • Poorly cut paper

• Paper too lightweight

• Excessive curl

Spots on copy • Wrapper wax or glue on sheets

• Excessive paper dust

• Dust from poor perforations

• Wax or soap used on drill

3-12 Generic MICR Funda m entals Guide

Preprinted forms considerations

The combination of consistent data format and element location makes preprinted forms useful in M ICR applications. Additional requirements for security features, either in the base paper stock or in the preprinted for m, come from the need to protect a financially negotiable documen t .

You need to consider several factors related to ink and paper when selecting a preprinted form for any type of laser printer. Preprinted check stock must not offset (transfer from a printed sheet onto other surfaces). Work closely with the forms vendor to ensure that requirements are und erstood and met. Always test the application on the appropriate printer before production printing.

Inks

Paper facts

Choosing the correct ink is the first step in designing forms that function well in Xerox printers. Inks for these forms must cure well, must not be tacky, and must not offset. In choosing an ink, you must consi der the am oun t of heat a nd pressur e to whic h the forms will be ex po sed whil e passin g thr ou gh the printer. You must also consider the dwell time–the amount of time that the preprinted paper is subjected to those conditions.

Good performance has been reported with the following ink types:

• Oxidative inks: The following qualities are desirable in oxidative inks:

– Non-volatile, cross-linkable vehicles – Internal and surface-curing driers – Minimal use of anti oxidants – No slip agents – pH in the press fountain high enough to permit curing

NOTE: Oxidative inks can require several days to harden satisfactorily.

• UV cured inks: Inks that are cured using UV (ultr avi olet) li ght change immediately from liquid to solid upon exposure to an intense UV light source.

Generic MICR Fundamentals Guide 3-13

Paper facts

• Laser inks: Inks that are formulated specifically for use on forms that will pass through laser pri nters are a recent development that holds considerable promise. These inks cure promptly (usually within 24 hours) and are formulated with laser printer conditions a s a de sign criterion. They can be expected to reduce offsetting and other problems encountered with other types of inks.

Laser inks may be oxidative, UV, or heat set types.

Another option is to use Xerox forms, whose performance is guaranteed. The s ame guarantee should be expected of the forms vendor chosen by the customer.

Security features

Checks and other negotiable require protection against fraudulent use. Security features can be incorporated into the base stock when the paper is made, or they can be part of the preprinted form. These features should be chosen to achieve sufficient document security without negative effe cts on printer operation.

A secure document is protected against both duplication and alteration. Security features should be selected to address each of these aspects effectively when they are used in a MICR laser printing system.

A detailed discussion of check security is contained in chap ter 8, “Security.”

Duplication detection

The most common security features for detecting duplication of forms include:

• Microprint: Extremely small type used to print a message or phrase that is readable under magnification

• VOID pantograph: A pattern of varying halftone screen frequencies in the check background that causes the word VOID to appear in the background of a copied check

• Split fountain backgrounds: Continuous fade from one color to another across the docu ment

• Microfibers: Tiny colored or UV treated fibers that are incorporated into the base paper stock and are easily visible under normal or UV illumination.

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Paper facts

• Watermark: A variation that is made in the opacity of the paper during manufacturing. An artificial watermark is typically a white ink image that is printed on the back of the check.

• Drop-out ink: Very low density ink that is used to print a message, usually on the back of the check

• Thermochromic ink: An ink that is used to create an image that changes color when warmed by a finger

Alteration prevention

The most common security features for detecting alteration of forms include:

• Security backgrounds: Patterns printed in the check background that show any attempt to alter the image. Regular patterns are preferable; irregular patterns may merge with altered areas.

• Fugitive inks: Inks that run when they come in contact with liquids

Application design

Intelligent application design can provide add itional protection against alteration.

• In left- and right-fill fields, pad any open space with additional characters. Asterisks (*) are recommended to fill in the convenience amount field (the amount written in numerals).

• Redundant data—duplicate information, such as the amount written in both numbers and words—makes altering the valid check data more difficult.

• Fonts with large, wide-stroke characters are more difficult to alter than small, narrow type faces.

Numbered stocks

Preprinting sequential nu mbers on the sheets of MICR stoc k is a useful tool fo r tracking stock usage. Numbered stock is helpful for determining the number of sheets that were used for a check printing job, reconciling against the size of the job and the number of sheets that were used but not issued as checks.

Following are some points to note for using numbered stocks:

Generic MICR Fundamentals Guide 3-15

Paper facts

• To achieve reconciliation without substantial waste, always use the stock sheets in the same order—lowest to highest— so that the sequence remains intact.

• Avoid gaps in the sequence.

• Storing unused stock without wrapping may cause runability problems the next time it is used.

• The numbering or de r de pends on how the pape r is lo aded in the feeder tray. If the paper is loaded face up, the lowest numbers must be at the top of the stack. If the paper is loaded face down, the lowest numbers must be at the bottom of the stack. For face down printing, eith er th e p ap er must be boxed face down or the paper boxes must be inverted before the paper is used .

• Synchronizing the sequential numbers with the check ser ial numbers is not recommended because of the complexity it adds to the production process. Operators are required to input the starting sequence number, and the job must be restarted any time a jam occurs.

Features to avoid

Some security features may either be ineffective or cause damage to the printer. Before making a major forms investment, always test new preprinted forms to verify that security claims are delivered without printer impact.

• Some security papers contain chemical indicators that produce vivid dye images in areas where erasers, bleaches, or chemical eradi cators have been applied. These indicators are intended for wet ink images and do not effectively protect dry ink images. They may degrade image quality, reduce document security, and severely impact printer reliability.

• Another type of chemical treatment of the base stock attempts to reduce the risk of alteration through improved image performance. Some, but not all, of these treatments improve permanence. There remains a risk of printer contamination, with associated degradation in image qual ity, reduction in image permanence, and potential printer reliabi lity impact s.

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Paper facts

• Many security features must be located in areas of the document where the printer places critical information, such as the payee name and the che ck am ount fields. However, if the feature interferes with the bonding of dry ink to paper, poor image permanence results. This negates the value of the feature and makes alteration harder to detect. If the feature co vers less than 20% of the paper surface , this risk is reduced.

Generic MICR Fundamentals Guide 3-17

Paper facts

3-18 Generic MICR Funda m entals Guide

4. Document design

Although other applications are possible, a MICR document is typically a negotiab le do cument, v ery often a che ck. H ow e v er, all types of MICR documents must be produced in accordance with the standards and methods that have been established for checks, in order for the automated payment systems to process them.

Check document content

A check is an unconditional order in writin g that:

• Is addressed by a person or legal entity to another person or legal entity.

• Is signed by the pers on giving it.

• Requires the bank to pay, on demand, a sum of money, after

The design of a check should enable anyone to quickly and easily enter and extract the necessary information.

A blank check normally has the characteristics that are described in the following sections. An issued check has the same characteristics, plus the variable data: paye e, date, amounts, and signature.

Security features

Security should be present on all negotiable documents to protect against tampering and duplication. They may be incorporated at the time the paper is manufactured or can be part of the prepr inted form, and a given sheet may include features from both sources. Form production considerations are discussed in chapter 3, “Pap er facts .” Issues related to do cument design are discussed in the next section.

a specific date.

For additional information on security paper and tampering methods, refer to “Security” chapter.

Generic MICR Fundamentals Guide 4-1

Document design

Background printing

While MICR documents may be printed on white or pastel colored paper, negotiable documents nearly always have some sort of background—a scenic image, a logo, or a pattern. Fixed form and variable information should print darker than this background.

The background printing must not interfere with extraction of the information that is required to process the completed check. Industry standards have defined requirements for the following areas that contain the necessary variable information:

• MICR line

• Conv e ni en ce am ou nt

• Amount in words

•Date

•Payee

•Signatures

In these areas, additional background printing limitations and measurements apply. Tighter limits are placed on reflectance, and contrast is def i ned in a localized manner that is more in keeping with the way automate d equipment detects check data. New scanner-based test equipment is now required to evaluate how a check design conforms to the new specifications.

Check issuers wh o do not print their o wn f orms must require the ir forms suppliers and application developers to adhere to ch eck background specificati ons.

Fixed information

The fixed data that appears on the face of either a personal or business check is necessary for the proper processing of the check.

Date line

The date is a required element on a check. It is written by the issuer and represents the day on or after which the amount of the check may be transferred. The date line should be in the upper right corner of the check.

If the application produces a completed check, the date should still be located in this area, but the actual line may be omitted.

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Account Title area

Document design

Date check number,

Fractional Routing and Transit

Number area

Payee and Amount in Words area

Drawee Institution and

Memo area

MICR clear band and MICR line area

Signature area

Convenience Amount

area

Figure 4-1. Typical U. S. personal check document design

layout

Amount lines

The amount of the check is also required. In order to prevent tampering, the amount should appear twice on the check. The amount that is written in numerals is called the “Convenience Amount,” while the amount that is entered as text is the “Amount in Words.”

ANSI standards sp eci fy the location of the Convenience Amount for all styles of checks, and this standard is followed throughout the world. The ar ea may be highlighted by the use of preprinted boxes and must include a dollar symbol ($). For completed checks, the box around the Convenience Am ount field sho uld be retained to aid in locating this data.

NOTE: The Xerox MICR font s conta in a dollar symbol, which is acceptable for all applications.

The area for the Amount in Words is normally located left of the Convenience Amount, but may be above it or below it. For completed chec ks, the line f or entering the Amount in W ords ma y be omitted.

Payee line

The payee area of the check provides a line for the purpose of entering the name of the payee. The line is often preceded by the words “PAY TO THE ORDER OF.” For completed checks, this line may be omitted, becaus e the payee information is already present.

Generic MICR Fundamentals Guide 4-3

Document design

Signature lines

The signature line or l ines are located in the bo ttom right p ortion of the chec k, above the MICR line . The si gnat ure area shoul d be located no lower than 8½ inches/216 mm from the bottom edge of the check to avoid interference with the MICR information in the clear band area.

The minimum clea r band di mension f or Xe ro x MICR printers i s ¾ inch/19 mm, because the line printed by a Xerox MICR printer is magnetic and ther ef o re m ust b e k ept o ut of the MIC R clea r ban d over the entire allowable registration range.

The signature lines may be omitted when a completed, signed check is issued; however, the ¾ inch/19 mm clear area must be retained. This clear area is measured from the lowest descending stroke of the signature, because any incursion into the MICR clear band can cause rejects or misreads.

Name of financial institution

The institution where the account is located is referred to as the “payor institution.” The payor institution name and address is generally printed in the lower-left section of the check, directly below the Payee and Amount in Words area. If it is adjacent to the MICR clear band, the institution name must be more than ½ inch/13 mm above the bottom of the check in a preprinted form, or ¾ inch/19 mm above the bottom if the check is printed by a Xerox MICR printer.

Memo line

A line is generally printed in the lower-left corner of the check, below the payor institution name. This information also must be positioned at least ½ inch/13 mm above the bottom of the check on a preprinted form, or ¾ inch/19 mm above the bottom of a check printed by a Xerox MICR printer.

Account title

The title of the account is normally printed in the upper-left corner of the check, directly a bove the payee line. This area provides the customer information, which could include address and telephone num ber.

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Document design

Check serial number

This number is usually printed in the upper-right corner of the check. It is not a required element of the check, and is provided as a convenience to the account holder. In most cases, the check serial number appears a second time in the MICR line.

Fractional routing number

This number in fractional format is printed in the upper-right corner of the check. It identifies the payor institution and is used in routing the chec k through the banking syste m. A portion of the routing number is also in the MICR line.

MICR line

The MICR line is the line of machine readable information that is printed at the bottom of each check. Financial institutions are dependent on the accuracy and integrity of the data in this line. Unlike the fixed elements of the form, the MICR line must be printed using magnetic ink and a special MICR font, such as E13B or CMC7.

MICR line (clear band) format requirements

The format of the MICR line must conform to the standards set by ANSI specifications. The MICR line is contained within the clear band area, which is located at the bottom of the check.

By ANSI standards, the minimum size of the clear band is defined as the bottom 5/8 inch/16 mm of the check document.

The clear band must not contain any magnetic material other than MICR characters. Because the entire Xerox MICR document uses the ma gnetic dry ink, make sure that no marks of any kind (cut lines, signature letters, etc.), other than the MICR line fo nt char acters, are printed in the cl ear band o n either side of the paper.

All MICR characters must be in a single line within the clear band. In accordance with ANSI standards, the MICR line must be positioned as follows.

• Between 3/16 inch/4.8 mm and 7/16 inch/11.1 mm from the bottom edge of the check

Generic MICR Fundamentals Guide 4-5

Document design

MICR clear band and

MICR band dimensions

• 5/16 inch/7.9 mm from the right edge of the check, ± 1/16 inch/1.6 mm

• Minimum of 1/8 inch/3.2 mm from the left edge of the check

The following figure illustrates the clear band dimensions for the E13B and CMC7 fonts.

E13B

MICR band

1/8" minimum

CMC7

MICR clear band and

MICR band dimensions

MICR band

3/16"

4.8 mm

1/4"

6.4 mm

± 1.6 mm

± 1/16"

5/16"

5/8"

16 mm

Clear band

4.0 mm minimum

7.9 mm

Figure 4-2. MICR clear band dimensions

4-6 Generic MICR Fundamentals Guide

Format specifications using E13B

The recommended clear band dimens ion for Xerox MICR printers using the E13B font is 3/4 inch/19 mm, to provide for tolerances of the printing and finishing systems, and to allow an extra margin of safety between the clear band and the magnetic ink on the rest of the check. If the clear band is not at the bottom of the sheet, keep 1/8 inch/4 mm below the clear band free of printing.

E13B character set

There are tw o types of char acters i n the E1 3B f ont: numb ers and symbols.

E13B numbers

Document design

The E13B font numbers are illustrated below:

E13B symbols

The E13B font has the following fo ur symbols.

On-Us symbol

This symbol tells the reader sorter that the next few numbers identify the account. Because the issuing institution determines the content of the On-Us field, the bank branch on which the check is drawn may also be indicated.

On larger business size checks, the On-Us symbol is also used to define a field on the left end of the check. This optional field, called the Auxiliary On-Us field, frequently contains a multiple digit serial number.

Generic MICR Fundamentals Guide 4-7

Document design

Transit symbol

The two Transit symbols tell the reader sorte r that the numerals between these symbols are the routing number that identifies the institution on which the check is drawn and where the document should be sent for processing. Checks are not processed in branch offices, but in central processing locations, which ensures that documents take the shortest route and the shortest processing t ime.

Amount symbol

The two Amount symbols tell the read er sorter that the numbers between the symbols are the amount of the check in cents. You seldom see this symbol or the Amount field when you are developing an application, printing a MICR job, or servicing the MICR printer. The amount is normally added later by the bank. Howe ver, some customer applica tions may add the Amount field while printing checks.

Dash symbol

The Dash symbol is sometimes used as a separator within the On-Us Field, alth ough reader sorter manufacturers discourage its use because of detection problems. Some banks use the Dash symbol to separate the bank branch number from the account number.

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Document design

E13B character design

All of the E13B characters are designed on a 7 by 9 matrix of

0.013 inch/0.33 mm squares (see figure 4-5.). The minimum

character width is four squares (or 0.052 inch/1.3 mm) for the numbers 1 and 2. The maxi mum width is 0.091 inch/ 2.3 mm for the number 8, 0, and four special symbols. All charact ers except the On-Us and Da sh symbols hav e a height of 0.117 in ch/3 mm. This does not corres pond to an exact point size usually specifie d for fonts, but is between 8 and 9 points.

The height of the On-Us symbol is 0.091inch/2.3 mm, and the dash is 0.052 inch/1.3 mm. Both heights are multiples of the basic 0.013 inch/0.33 mm unit.

0.117 in.

0.091 in.

0.078 in.

0.065 in.

0.052 in.

Figure 4-3. E13B character matrix design

For characters 0, 8, and symbols For characters 4, 6, 9 For characters 3, 5, 7 For characters 1, 2

This is a 7 by 9 matrix of

0.013 inch/0.33 mm squares

Note:

1. All characters are centered around a horizontal center line.

2. All characters are right aligned.

3. Minimum height of right edges is

0.052 inch/1.3 mm.

Field formats—E13B font

The MICR line contains up to 65 character positions. These positions are numbered and grouped into five fields, which are read from right to left.

Generic MICR Fundamentals Guide 4-9

Document design

1. Amount

2. On-Us

3. Transit

4. External processing code (optional)

5. Auxiliary On-Us (optional)

All checks have at least three of the fields (Amount, On-Us, and Transit). Commercial checks may also have an Auxiliary On-Us field, located on the left of the ch eck. Some checks also have an External Processing Code (EPC) digit, located between the Transit and Auxiliary On-Us fields.

The Amount and Transit fields have a standardized content, while the contents of the On-Us and Auxiliary On-Us fields can vary to meet the individual bank requirements. The following figure illustrates the placement of the four fields on a check in the U. S.

Transit Number field

On-Us fieldAuxiliary On-Us field

Amount field (blank at time of printing)

Figure 4-4. MICR line fields

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Document design

Document Specifications form

For accurate formatting of the entire MICR line, each bank should provid e a MI CR D ocument Specifications form to identify the proper contents of the various character positions. (Refer to figure 4-4). The MICR Document Specifications form includ es:

• The account number, title, and address

• General specifications regarding c heck size and format

• The position of the control characters and digits that will be entered into the routing field

• The structure of the On-Us and Auxiliary On-Us symbols

• General specifica tions regarding the quality control procedures of the bank

Each MICR symbol, and the numbers or spaces between those symbols, must be properly registered so that the fields do not flow into one another.

The exact field structure depends on the national standards. Field lengths may vary as a function of the national requirements and even the detail usage of the symbols may be different. For example, although Australia uses the same length and bracketing structure for the Amount field as the U. S., their “starts” are equivalent to the Transit field with a Transit symbol, but they “close” with an On-Us symbol.

Even within the national standards, variation can exist within fields. It is always best to identify the required field structure through the use of the bank's MICR Document Specifications form for a specific account.

Generic MICR Fundamentals Guide 4-11

Document design

Figure 4-5. MICR Document Specifications form (U. S.

example)

NOTE: In this example, X denotes blank spaces required by the issuing bank.

4-12 Generic MICR Funda m entals Guide

Document design

Amount field

The Amount is the first field on the right, located between character boxes 1 and 12. When this field is used, position 12 contains the Amount field symbol, and positions 2 through 11 contain the actual amount. The amount is right-justified, and all unused positions to the left are filled in with zeros.

The Amount field is usually empty when the document is printed; the amount is added later by the bank. However, some applications may add the Amount field while printing checks.

On-Us field

The second field from the right is the On-Us field, located between character boxes 14 and 31. It follows a blank space at position 13, which is a separator from the Amount field.

The On-Us field includes variable information from the banking institution, including the account number. It contains the On-Us symbol, at position 14 and 31 or 32.

To the left of the On-Us sym bol, readin g right to left as the rea der sorter does, are the account number, the bank branch number, and the check number. The check serial number is typically to the right o f the On-Us symbol. Since the issuing institution determines the content of the On-Us field, the bank branch on which the check is drawn on may also be indicated. The last position is usually followed by a blank in position 32.

The Dash symbol is sometimes used as a separator within the On-Us field. This is not recommended, however, because the dash is difficult to detect.

Trans it field

The Transit field is located between character boxes 33 and 43. The Transit symbol is located at po sitions 33 and 43. On a check having four fields, like the one in figure 4-3, this field is second from the left. How e ver, shorter checks (such as personal checks) do not have an Auxiliary On-Us field. In this case, the Transit field is the farthest left of the three fields. The Transit field, like the Amount field, is right-j ustified, wi th all unu sed positions to th e left filled with zeros.

Generic MICR Fundamentals Guide 4-13

Document design

External processing code (EPC) field

The External Processing Code (EPC) field is an optional field between the Transit and Auxiliary On-Us fields at position 44 or

45. When present, this field indicates that the document is

eligible for special processing.

Auxiliary On-Us field

The Auxiliary On-Us field is an optional field that is sometimes used by the banks for additional processing information or high value serial numbers. When it is present, it is the farthest left on the check, between positions 45 or 46 through 65.

This field is not present on personal checks because of space limitations. On business checks, it usually contains the check serial number or accounting control information specific to that account.

Field formats summary

The following table provides a summary of the MICR field formats and character positions using the E13B font.

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Document design

Table 4-1. MICR field formats—E13B

Field Position Description

Amount 1 to 12 Fixed field signifying the dollar value of the check.

Position:

• 1 Opening amount symbol

• 2 to 3 Cents

• 4 to 11 Dollars (zero-fill to left)

• 12 Closing amount symbol

• 13 Space

On-Us 14 to 31 or 32Content is determined by each institution; generally contains the

account number. May optionally extend to include position 32. May also contain the serial number, the transaction code, or both. The symbol located nearest to the left edge of the document, must end more than ¼ inch/6.35 mm from the left edge of the document.

Position:

• 14 On-Us symbol

• 15 to 31 or 32 Generally contains the account number, and may also contain the serial number, transaction code, or both.

• 31 On-Us symbol if not used to extend the field

• 32 Space, or On-Us symbol if the field was extended

Transit 33 to 43 Fixed field identifying the institution upon which the check is drawn.

Position:

• 33 Opening transit symbol.

• 34 Check digit. This number combined with the first eight digits verifies the accuracy of the routing number in computer processing.

• 35 to 38 Institutional identifier (a four-digit check routing symbol).

• 39 to 42 Check routing symbol. The first two digits are the federal reserve district for the institution. The third digit identifies the federal reserve office (the head office or branch) or a special collection arrangement. The fourth digit shows the state for the institution, or a special collection arrang ement.

• 43 Closing transit symbol.

External Processing Code (EPC)

44 or 45 External Processing code (EPC) field. If present, represents

participation in an authorized program that requires special handling or processing in the collection system.

Auxiliary On-Us (optional)

45 or 46 to 65Content determined by each institution. Contains numbering,

transaction codes, and internal controls. Used only for checks longer than 6 inches/152 mm). The right most symbol must start within ¼ inch/

6.35 mm of the Transit symbol farthest to the left.

Generic MICR Fundamentals Guide 4-15

Document design

Character alignment

CMC7 font

The bottom edges of adjacent E13B MICR characters within the same field are in alignment within:

• ± .007 inch/0.18 mm (CPA—Canada)

• ± .015 inch/0.38 mm (ISO—International)

• ± .030 inch/0.76 mm (ANSI—U. S. only) Although this is a concern for impact printing, MICR characters

printed on laser systems are always properly aligned.

NOTE : The Amount field of the MICR l ine is not no rmally printed by the laser printer, but is added by a proof machine at the bank of first deposit. The proof machine, being an impact device, may cause alignment errors.

The CMC7 font is an alternative MICR font that has been adopted in various countries throughout the world.

CMC7 numbers and symbols

The usage of the CMC7 special symbols generally parallels the usage of the E13B special symbols. There are, however, significant differences.

Figure 4-6. CMC7 MICR font character set

4-16 Generic MICR Funda m entals Guide

Document design

The CMC-7 font consists of 10 numeric characters (0-9), five special symbols, and 26 alphabetic characters (A-Z). The five special symbols are illustrated in the following figure:

Figure 4-7. CMC7 special symbols S-1: Indicates the start of the bank's internal information

(account number, etc.). Although it serves a purpose similar to the E13B On-Us symbol, it is not used in the CMC7’s equivalent to the E13B Auxiliary On-Us field.

S-2: Identifies the start of the Amount field. Unlike the E13B structure, this symbol is not used to terminate the Amount field. The CMC7 Amount field terminates when the appropriate number of digits (minimum 10, maximum 12, followed by a blank) have been detected.

S-3: Used as the terminator for the bank routing information. It also functions as the terminator of the check number field (following a minimum of four digits, maximum of seven digits).

S-4: Not used. Although its structure is defined, this symbol usually does not appear in the structure of the MICR line.

Generic MICR Fundamentals Guide 4-17

Document design

Character design

S-5: Indicates the ro uting numb er that identifi es the institut ion on

which the check is drawn and where the document shou ld be sent for processing. This symbol is the equivalent of the E13B Transit symbol. However, it is not used to terminate the bank routing identification.

The CMC7 font differs from the E13B font in character height and width. The height of all of the numeric characters is 0.112 inch/2.85 mm. Special symbols are 0.106 inch/2.70 mm. Unlike the E13B font, the CMC7 characters all have the same width. Each CMC7 character format consist of seven vertical strokes separated by six spaces of 0.3 or 0.5 mm ( r eferred t o as short and long intervals). Each character contains two long in terv als and four sho rt intervals. Different permutations of the long and short intervals identify each character.

Stroke width: The difference between the right

edge and the left edge of a stroke is 0.004 to 0.007 inch/0.10 to 0.19 mm.

Short interval:.3 mm. The distance between the right edges of successive strokes is 0.0096 to

0.0144 inch/0.24 to 0.36 mm.

Long interval: The distance between the right edges of successive strokes is 0.0176 to 0.0224 inch/

0.44 to 0.56 mm.

Figure 4-8. CMC7 stroke and interval dimensions

The fonts are optimized for each product. They are not interchangeable between products.

4-18 Generic MICR Funda m entals Guide

MICR character spacing requirements

Reader sorters have timing limit s that prevent them from handling extreme variations in character spacing. The average spacing requirement for MICR characters is 0.125 inch/6.4 mm per character (8 characters per inch).

The MICR specifications have a tolerance on the 0.125 inch/6.4 mm spacing requirement of ± 0.010 inch/.3 mm. Specifications also state that the accumulated error must not exceed field boundarie s, shown in table 4-1. MICR characters are right justified and the numbers are read from right to left. This means that you might need to pad the MICR line with leading blanks so that the numbers start in the correct position.

Character spacing algorithm for 300 dpi

Document design

MICR printing systems print at 600 or 300 dots per inch. At 600 dpi, there are no issues with character spacing. 600 dpi can be divided evenly by 8 characters per inch, resulting in 75 dots per character.

Howe ver, 300 dpi, when di vided b y 8 char ac ters p er inch , results in 37.5 dots per char acter. The system cannot print half a dot, so it cannot print each character at exactly 8 characters per inch.

You can achieve an average of 37.5 dots per character by using a proportional spaced f ont wit h a spacing al gorithm that places a space of one dot after every second character. In other words, two characters of 37 dots are printed, followed by a one-dot space, then the sequence is repeated. This algorithm is used extensively in high volume printing installations.

Fixed pitch and proportional font spacing

The relationship between the input character and the out put character or spac e is shown for proportional spaced fonts in table 4-3, and for fixed pitch fonts in table 4-4.

NOTE: The relationship between the input character and the output character may differ slightly from these tables for some Xerox MIC R products . These di ffer ences are primarily f oun d with the revision control character (?) and the special symbols.

Generic MICR Fundamentals Guide 4-19

Document design

The following HP PCL escape sequences must be entered exactly as shown to select the Xerox MICR fonts:

• E13B: <ESC>&100<ESC>(0U<ESC>(s0p8.00h9.00v0s0b0T

•CMC7: <ESC>&100<ESC>(1U<ESC>(s0p8.00h9.06v0s0b0T

NOTE: The PCL 5 font rotation commands are used to rotate the E13B and CMC7 portrait fonts fo r landscape applications.

Table 4-2. PCL fixed pitch MICR font characteristics

File name E13B-P.FNT CMC7-P.FNT

Orientation Portrait Portrait Symbol set OU 1U Pitch Fixed Fixed HMI 8.00 CPI 8.00 CPI Point 9.00 9.06 Style Upright Upright Stroke weight 0 0 Type face Line printer Line printer

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Document design

Table 4-3. Character conversion and spacing of proportionally spaced MICR

fonts (LCDS printing only)

Input character

ASCII symbol

(space) 20 (space) 37 (space) 37

! 21 (space) 1 dollar symbol 37 $ dollar symbol 37 dollar symbol 37 030037037 131137137 232237237 333337337 434437437 535537537 636637637 737737737 838837837 939937937

: 3A Transit symbol 37 S-1 symbol 37

; 3B Amount symbol 37 S-2 symbol 37 < 3C On-Us symbol 37 S-3 symbol 37 = 3D Dash symbol 37 S-4 symbol 37 > 3E (not used) -- S-5 symbol 37 A 41 (space) 1 (space) 1 B 42 (space) 2 (space) 2

C 43 (space) 4 (space) 4 D 44 (space) 8 (space) 8 E 45 (space) 16 (space) 16 F 46 (space) 32 (space) 32 G 47 (space) 64 (space) 64 X (space) 37 (space) 37 Y (space) 38 (space) 38

a Amount symbol 37 (not used) -d Dash symbol 37 (not used) -o On-Us symbol 37 (not used) --

t Transit symbol 37 (not used) -z On-Us symbol 37 On-Us symbol 37 ? revision control

Input code

Hex Value

E13B font CMC7 font

Printed result Dot width Printed result Dot width

37 revision control

character

Generic MICR Fundamentals Guide 4-21

Document design

Table 4-4. Character conversion and spacing of fixed pitch MICR fonts at 300 dpi

Input character

space (space) 37.5 75 (space) 37.5 75

$ dollar symbol 37.5 75 dollar symbol 37.5 75 0 0 37.5 75 0 37.5 75 1 1 37.5 75 1 37.5 75 2 2 37.5 75 2 37.5 75 3 3 37.5 75 3 37.5 75 4 4 37.5 75 4 37.5 75 5 5 37.5 75 5 37.5 75 6 6 37.5 75 6 37.5 75 7 7 37.5 75 7 37.5 75 8 8 37.5 75 8 37.5 75 9 9 37.5 75 9 37.5 75

: Transit symbol 37.5 75 S-1 symbol 37.5 75

; Amount symbol 37.5 75 S-2 symbol 37.5 75 < On-Us symbol 37.5 75 S-3 symbol 37.5 75 = Dash symbol 37.5 75 S-4 symbol 37.5 75 > (not used) -- -- S-5 symbol 37.5 75 a Amount symbol 37.5 75 (not used) -- -d Dash symbol 37.5 75 (not used) -- -o On-Us symbol 37.5 75 (not used) -- --

t Transit symbol 37.5 75 (not used) -- -z On-Us symbol 37.5 75 On-Us symbol 37.5 75 ? revision control

E13B font CMC7 font

Printed result

character

Dot width @300 dpi

37.5 75 revision contr ol

Dot width @600 dpi Printed result

character

Dot width @300 dpi

37.5 75

Dot width @600 dpi

4-22 Generic MICR Funda m entals Guide

Check size

2.75 inches/ 70 mm

Document design

The ANSI specified size limits for a check are shown in the following figure.

Length: 6 inches/152 mm minimum

8.75 inches/222 mm maximum

Height: 2.75 inches/70 mm minimum

3.67 inches/93 mm maximum

6 inches/

152 mm

Minimum size document

Most personal checks in the U. S. use the minimum size requirements. Commercial checks vary in size; however, most are closer to the maximum requirements.

Although the above dimensions are limited to U. S. standards, each national standards organization has established the minimum and maximum size documents that are used in their jurisdictions, shown in the following table. The bank's MICR Document Specificat io ns form usually provid es the defini ti ve guide regarding t he document sizes.

3.67 inches/ 93 mm

Maximum size document

8.75 inches/ 222 mm

Figure 4-9. Check size limits

Generic MICR Fundamentals Guide 4-23

Document design

Table 4-5. Check dimensions summary chart

Country Check dimensions Notes

Australia 6.25’’ x 2.75’’/162 x 70 mm (min.)

8’’ x 3.66’’/203 mm x 93 mm (max.)

Bermuda 6.125’’ x 2.75’’

7.4’’ x 3.15’’

Brazil 175 mm x 80 mm Typically 4 checks per 8.5 x 12’’

Canada 6’’ x 2.75’’ (min.)

8.5’’ x 3.66’’ (max.)

France 175 mm x 80 mm Check booklet: 225 mm x 80

Hong Kong 7’’ x 3.25’’

8.5’’ x 3.5’’

Italy 180 mm x 72 mm (min.)

260 mm x 72 mm (max.)

Spain 175 mm x 80 mm 175 mm x 100 mm with top stub

Typically 8’’ x 3 5/8’’

10.5’’ x 3.15’’ with stub

sheet if check has stub; otherwise 4 checks per 7.25 x 12’’ sheet

Typically 6 1/4’’ x 2 3/4’’

mm, 102 mm x 175 mm, and 225 mm x 102 mm

UK 6.125’’ x 2.75’’/155 x 102 mm (min.)

8.25’’ x 4’’/209 x 101 mm (max.)

USA 6’’ x 2.75’’ (min.)

8.75’’x 3.66’’ (max.)

Typically 8’’ x 3’’

Typical personal check: 6’’ x 2.75’’ Typical commercial check:

8.5’’ x 3.67’’

4-24 Generic MICR Funda m entals Guide

Other application considerations

Printing on a Xerox MICR printing system raises some a dditional application con s id erations.

T wo sided printing

Two sided (duplex) printing may be used in a MICR application, but the forms design and the application structuring require care.

• The reverse side of the clear band must not contain any magnetic printing. The only magnetic printing that is permitted in the clear band on either side of the sheet is the MICR line.

• The MICR line should be printed on the first imaged side of the duplex sheet.

Document design

• The endorsement a rea on the bac k of the chec k mus t be ke pt free of any printi ng that would interfere with bank endorsements.

NOTE: This information is applicable only if your system supports duplex printing.

Perforations

If you are using perforated forms, the perforation must not interfere with the clear band area. Therefore, it should not be underneath the MICR line. Refer to “Perforation” in chapter 3, “Paper facts,” for guidelines for using per forations.

Multiple-up printing

For a check printing operation, several check documents can be printed on each sheet. This is called “multiple-up” or “multi-up” printing, which means that on e or more logical pages ar e printed on one physical page. Perforated paper is often used to separate the documents or they may be separated after printing by gangcutting or slitting the sheets.

The following figure shows some possible sheet layouts for multiple- up prin ting.

Generic MICR Fundamentals Guide 4-25

Document design

Document

Stub Stub

Document

Stub

Document

Stub

Four-up with check register

Stub

Document

Stub Document

Document

Three-up with no stub

Stub

Document

One-up with stub*Two-up with stub

*The maximum check height is 3.67 inches/93 mm, or one-third

of an 8.5 by 11 inch/216 x 279 mm sheet.

Figure 4-10. Sheet layouts for 8.5 by 11 inch or A4 paper

A multiple-up format, however, raises the following application considerations.

• Avoid multiple-up applications in which the last sheet is only partially filled.

Example: In a 3-up check application that will print 100 checks, the last page of the job prints only one check. This would leave the remaining two checks on the form blank. Blank checks on the last sheet are not acceptable.

Potential solutions include: – Ensure there is always enough data to fill the la st page,

with partial pages being “voided” by the data.

– Design more than one form when the correct form is being

selected for the final page by the software program.

• Problems can occur when the sequence of the printed application does not meet the requirements of the site finishing equipment.

4-26 Generic MICR Funda m entals Guide

Readability

Document design

Example: A 3-up a pplica tion is p rinted with chec ks num bered 1 through 6, in that order. After they are cut, three stacks of finished checks are produced: the first with check numbe r s 1 and 4, another with numbers 2 and 5, and a third with numbers 3 and 6. For this situation, the host application may need to be adjusted to enable the proper sequence to be maintained during fi ni shi ng .

NOTE: For appropriate page sizes, refer to the printer documentation.

When designing MICR documents, it is critical to remember that the document acts as a v e hicle to tr ansfer money from one party to another. The MICR document must clearly communicate the information required to complete that transfer, without interference from colorful backgrounds or confusing layout. Digital image capture, processing, and storage for the entire check make this requirement more important.

Work is in progress to make the digital image of a check legally binding when captured and processed by banks. This is necessary to permit truncation of the paper documents early in processing and eliminate the cost of transporting the paper to the issuing bank. Checks should be designed to be easily interpreted when digitized into black and white images.

MICR documents are not the only documents in which readability is a concern. Many payment processing systems are designed to use an OCR-printed turnaround document to direct a check based payment. In these cases, readability of the OCR line may be compromised if the document is print ed using magnetic ink. The processing system detect checks by the presence of magnetic ink and initia te an E13B font recognition routine. If the turnaround document is magnetic, failure to read would result. Therefore, MICR printers are not recommended when an OCR font is used for data collecti on.

Generic MICR Fundamentals Guide 4-27

Document design

4-28 Generic MICR Funda m entals Guide

5. Document processing

The life cycle for a MICR document involves three types of processing equipment:

• Proof machin e

• Reader sorter

• Repair station

Proof machine The proof machine transfers the amount from the Convenience

Amount field to the MICR encoded Amount field. It prints the Amount field onto the ch ec k using either a thermal transfer or an impact ribbon printer. The proof machine may be manually operated or automated using a scanner and character recognition tech nol o gy .

Reader sorter The checks are then sent through a series of reader sorter

passes. The reade r sorter inputs data fr om th e ch ecks, captures each check image, endorses the checks, and sorts them according to their destination.

The checks are separated into either “transit items” drawn on other banks or On-Us items, drawn on the processing bank. Transit items are segregated into different groups and may receive several reader sorter passes, depending on the destination.

Repair station If an error occurs in the reader sorter, the document usually goes

to a repair station. Here, the MICR line is read both magnetically and optically, with operator intervention in severe cases. A new, corrected MICR line is applied to the check.

The final measure of the quality of the MICR document is how well it passes through the au tomated payment processing system.

Generic MICR Fundamentals Guide 5-1

Document processing

Proofing checks

Amount determination errors

All checks start automated processing in the Proof of Deposi t department. Check processing relies on a series of debits and credits throughout the process to identify errors as close to the source as possible.

The first step is t o pro ve that the deposit is vali d. A d eposit sli p is balanced again st the value of the items deposited with it. Errors in MICR amount encoding or deposit ticket completion show up as a failure to balance.

To encode the amount, an operator may read the check and manually enter the amount, or an automated scanner may capture and analyze an image of the check to determine the correct MICR Amount field content. Poorly designed checks may interfere with amount determination in the following ways:

• Non-standard amount location

• Amount value written too small or too large

• Interference of check background design elements with amount field identificatio n

• Lightly written check amounts

• Use of colored inks that do not provide sufficient contrast

Whenever the value of the check cannot be quickly and accurately determined, the cost of processing the item increases. The bal ancing process continu es throughout pa yment processing, but th e impact of check design most critical here.

Proofing equipment errors

Another potential problem in proof encoding is compatibility of the laser printed check with the encoding equipment. For many years, all proofing equipment used imp act ribbon technology, which proved to be stressful for matrix head reader sorters (see next section).

5-2 Generic MICR Fundamentals Guide

Non-impact ribbon technology offers higher encoding speed and fewer matrix read processing issues. However, problems occur with transfer of ink to the paper. Paper roughness must be controlled. Also, for MICR laser printers, which apply a release agent or oil to the fuser, the specified fuser agent must be used and the metering system maintained according to Xerox schedules.

Reader sorter function

Reader sorters are machines that read magn etic ink characters that are printed using the E13B or the CMC7 fonts. Reader sorters recognize the magnetic waveform of the character, its magnetic pattern, its visual pattern (using OCR), or a combination of these characteristics. Reader sorters can be programmed to validate and sort by specified MICR line data fields. They may also be capable of endors ing, microfilming, imaging, and providing processing information in hardcopy.

Document pr ocessing

How well the document passes through the reader sorter depends of the following:

• Document characteristics – MICR line format and placement – Print quality – Magnetic signal strength of the image – Paper characteris tics.

• Reader sorter characteristics – Reader sorter type – Setup adjustments – Quality and quantity of operator maintenance. – Operation of the reader sorter

• Damage resulting fro m prior processi n g – Handling damage – Lead edge fluff

Generic MICR Fundamentals Guide 5-3

Document processing

Waveform generation

All types of reader sorters react to any magnetic material in the clear band, intentionally placed on a document or not.

Reader sorters read from right to left and the magnetized ink generates a waveform. The following figure illustrates the process.

Figure 5-1. On-Us symbol waveform reading

First, the character is magnetized by the reader sorter. Then, as the character pa sses the read h ead, edg e A gener ates a change in magnetic flux, produ ci ng pea k A of the w aveform. There is no change in flux as the character between A and B passes the head. As edge B passes the head, a change in flux is sensed producing p eak B of the waveform.

This continues through edges C, D, E, and F, producing the entire waveform.

5-4 Generic MICR Fundamentals Guide

Types of reader sorters

The following recognition technologies have been incorporated into MICR reader sorter devices.

Waveform reader sorters

Wa vef orm reader sorters measure the magnetic signal wav ef orm or pattern of the MICR character as the documents pass the read head. Waveform reader sorters are often referred to as “single slot” or “single gap” readers because the read head contains one magneti cally sens itiv e slot o r gap , which co v ers th e height of the entire ch aracter string in the clear band. Each MI CR character that passes the re ad slot produ c es a waveform signal. This signal is compared against the known waveforms of the MICR character set to determine which character was read.

Document pr ocessing

Waveform reader sorters are also called “DC readers,” because they use a constant magnetic field to magnetize the characters.

Waveform reader sorters are generally low to medium speed reading devices. The reject rates for these readers is slightly higher than for matrix readers.

Matrix or AC reader sorters

Matrix readers use a series of small r ead h eads tha t are stac k e d in close proximity, each of which reads a small strip of the character string. The segments of the MICR characters register as binary magnetic flux transitions at each read head. These pulses are combined and used to build a two dimensional bitmap for each character. This bitmap is then compared to known bitmap patterns to determine the identity of the character.

To simplify bitmapping, readings from groups of heads are logically combined to produce a single value. This slightly increases sensitivity to spots, but results in lower reject rates for matrix readers.

Matrix readers are also called “AC readers,” because they use an oscillatin g magnetic field to magnetize the characters. These oscillations cause a seri es of waveform pe aks in a character stroke, which are recorded as a binary 1 in the bitmap image of the character.

Generic MICR Fundamentals Guide 5-5

Document processing

Optical reader sorters

Dual read magnetic reader sorters

Optical readers typically use a light source and some type of photosensitive matrix array to convert an image of the character into a set of electrical signals. Optical readers that can interpret the characters can be used to input data into an automated reading system. They are frequently used in reject repair equipment.

Some reader sorters use a dual read approach, in which two read stations magnetize and read the entire clear band area of the document independently.

The simplest dual read reader sorter uses two waveform readers. Like single read waveform reader sorters, each MICR character that passes through the read slot produces a waveform signal at each read station. The waveforms are compared against the known waveforms of the MICR character set, using different algorithms and circuitry in each station, to determine which character was read.

Another type of dual read reader sorter has one single slot waveform read station and one matrix head read station. The single slot reader compares the waveforms against the known MICR character wav ef orms, and the matrix re ader buil ds a digital bit map for each character and compares that to known character bitmaps.

With the dual read technology, the system compares the results of the first head read with those of the second. If a character can be interpreted by only one of the read stations, the successful reader result is used. If neither read station properly identifies a character, that character is rejected. Conflicting interpretations between the two heads al so cause s character rejection.

An important aspect of reject rate diagnosis i s understanding the recognition mode used by a dual-read reader sorter. Processing performance sh ould be e v aluat ed only i n dual-re ad mode . Use of diagnostic settings to turn off one of the read stations, or to reject on either station independently, inflates the repo rted reject rate.

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Hybrid magnetic and optical reader sorters

Hybrid reader sorters use two read technologies:

• Magnetic waveform recognition

• Optical character recognition

Compared to other types, hybrid reader sorters have very high accuracy rates, because they interpret and compare the results produced by the magnetic waveform recognition and the optical character recognition. If a character cannot be interpreted by MICR waveform analysis, the system takes the results of the optical recogn ition. In diagnostic situations, understanding the recognition mode is important.

Another f orm of h ybrid equip ment, used primarily in loc k bo x an d remittance processing, uses optic al and magnetic recognition in a fundamentally different way that can cause problems with MICR documents. Th ese reader so rters process an OCR printed turnaround document, followed by a MICR printed check. They identify a chec k by the p resence of ma gnetic ink, t hen s witch to a MICR font recognition system. If the turnaround document is printed with an OCR font but uses MICR ink, it may be misidentified and rejected, although the OCR font is properly printed.

Document pr ocessing

Processing speeds

Reader sorters are availab l e in a v ariety of siz es and pro cessing speeds. The smallest can fit on a desk top; the largest may be the size of a mainframe computer. Performance may be categorized as low, medium, or high speed.

The speeds may be defi ned as follows, ba sed on the speed of handling a 6 inch/152 mm long document:

Low speed: Process 100 to 750 documents per minute. These machines are usually found in small banks or are used fo r handling small volumes of checks. They use waveform recognition.

NOTE: Proofing devices also process documents at these speeds. Although these devices can operate in reader sorter mode, they may not have automatic document handlers and require manual hand feeding.

Generic MICR Fundamentals Guide 5-7

Document processing

Medium speed: Process 1,000 to 1,500 documents pe r m inute. These machines usually use waveform recognition, frequently with dual or hybrid read.

High speed: Process 2,000 or more documents per minute. These machines are typically found in larger banks, clearinghouses, processing centers, etc. They generally use matrix or dual read technology.

Paper handling by reader sorters

Reader sorters are designed to handle batches of check documents of mixed sizes, weights, and conditions (pieces torn away, creased, etc.), at high speed. This may result in reader sorters handling documents somewhat roughly.

Documents may undergo from 10 to 20 separate passes through reader sorters. If the leading edge of a check is damaged slightly in one of these passes, repeated sorting can increase the damage until the docu ment no longer f eeds p roperly. Because of the high cost of handling misfeeds, check processors limit the types of paper that can be used to print MICR documents.

Reader sorters typically use the following mechanisms to handle MICR documents.

Hopper jogger

The hopper jogger is usually least stressful to documents. It vibrates the documents to aid in aligning and separating them.

Separator

A picker belt forces the first document forward, while a restraint system retards the remainder of the documents. The initial shearing force and acceleration applied to t he doc um en t is generally followed by a deceleration as the document is fed into a multiple-documen t detection statio n.

If the forces are too extreme, or the document is too weak, the document could collapse, causing wrinkles. Wrinkles normally appear in the Amount field.

5-8 Generic MICR Fundamentals Guide

Aligner

Within the aligner, a series of wheels drive the bottom edge of the document toward the back side of the reader sorter so that the MICR line is in a predicta ble location. The wheels hav e a series of plastic fingers that make contact with the back side of the document and force it against the aligner drum.

Read/write heads

A wheel with a v ery short nap bristle brush on its surface presses the document first against the write head, then against the read head. In orde r to optimize the pressures for handling debossed characters and fol ded documen ts, the h ead ma y be p ositioned at a sharp angle. Material can be scraped off the document and spread out by the bristled wheel pressing on the paper.

If the wheel is worn, the spread i ng or scraping processes could be unev en, r esulting i n a lump of m aterial being r edeposited on a later document.

Document pr ocessing

NOTE: This process is typical only of IBM 3890 matrix reader heads. Other reader sorters may differ in several details.

Item numbering and endorsing stations

After the document is read, belts carry it through item numbering and endorsing stations .

If certain plates or document guides in these stations are misaligned, docu ment abrasion could occur here.

Microfilm or image capture unit

Optionally, the document may enter a microfilm or image scanning unit . In the IBM 3890, the document is he ld to a plate by a vacuum and driven by a toothed belt that is in the center of the plate. The edges of the plate, the belt-slot, or the teeth may be sharp enough to scrape the document surface.

Generic MICR Fundamentals Guide 5-9

Document processing

Sorter pockets

Reject repair

The document finally arrives at a diverter plate, which sends it into the pocket that the reader sorter program sele cts based on the MICR line data. The pocket has a pair of metal springs that press the document onto the stack that is in the pocket.

If the poc k e t i s em pty, the document ma y impa ct ag ainst the r ail s at the bottom of the pockets with greater than normal velocity. Short-grain docume nts are especia lly vuln erab le to leadin g edge damage from this impact, and layers of paper may separate a small amount on each pass. After multiple passes, this can cause lead edge fluff.

If a MICR document cannot be read or is badly damaged in processing, it goes to a reject repair station. Here, it is read again, using low speed optical and magnetic read stations and operator intervention when th ese read stations fail to recognize all the characters. A similar process is also used for return processing of rejected items.

After the correct M ICR line encod ing is determined, a repair strip , encoded with the information that the processing bank requires, is added to the bottom. In effect, a new MICR clear band is added and encoded below the original one.

Figure 5-2. Check with reject repair strip

5-10 Generic MICR Funda m entals Guide

Document pr ocessing

If the document is badly damaged, or if the processing center does not have an automated repair station, a document carrier envelope may be used. This is a check-sized, translucent envelope designed to fully enclose a check while addi ng a new MICR clear band and encoding area at the bottom.

In most cases, processing banks do not encode the full MICR line on transit items. Instead, they encode only the routing number and amount information that they need in order to pass the document on. This means that when the issuing bank receives the repaired document, it must remove the repair strip and repeat the repair proce ss with al l fi elds encoded.

The reject repair process results in the issuing bank incurring costs for rejects on any bank’s equipment, and is a factor in any MICR quality issues that the bank raises du e to high reject rates.

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Document processing

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6. Quality control

MICR printing requires constant quality control. Special equipment is required to produce quality documents that meet the X9.27, X9.13, X9.7, and ISO 1004 specifications. You should develop a formal quality control program to ensure that all check printing specifications are met.

Key factors for producing good MICR documents include:

• High-grade xerographic print quality

• Good character uniformity when viewed with back lighting

• Few or no defects

• Good fusing

• Good paper quality mee ti ng xerographic and MICR processing needs

• Good forms d esign

• Consistent printer maintenance

MICR documents should be printed only by operators who have the proper knowledge and experience.

Print quality specifications

Banks use the following print quality specifications for MICR characters:

• Horizontal posi ti o n

• Vertical position

•Skew

• Character-to-character spacing

• Character size

• Voids or deletions

• Extraneous ink or spots

• Debossment

Generic MICR Fundamentals Guide 6-1

Quality control

• Magnetic signal strength

These are the ANSI print specifications for MICR. Other countries that use MICR have similar specifications.

Optical tools used to check MICR

Although MICR documents may appear satisfactory to the unaided eye, the MICR tools are required to determine if a document is within specifications.

MICR Gauge

The MICR Gauge lets you compare the location of Xerox MICR printed information to industry standards. The Gauge is printed on a thin sheet of flexib le plastic , which is attach ed to the bo ttom of a piece of h ard plastic. Slip the document that you are evaluating between the two pieces of plastic.

Figure 6-1. Example of a MICR Gauge

6-2 Generic MICR Fundamentals Guide

Small Optical Comparator

The Small Optical Comp arator also compares th e M IC R printin g to industry standards (see the following figure). Its main difference from the MICR Gauge is that the Comparator’s nominal 8x to 12x magnification and built-in measuring scales enable you to measure printing characteristics that require greater precision.

Measures character-to-character spacing

Quality control

Measures spots and deletions

Measures character size

Figure 6-2. Small Optical Comparator

Magnetic testing equipment

Each MICR symbol and character has an ideal waveform and nominal signal strength. Every MICR printing technology modifies the waveform from the ideal in a different way, so that the nominal MICR signal v aries some what among the chara cters and symbols. These are characteristics of the printing technology and font design, and cannot be adjusted in Xerox MICR printers. For this reason, the signal strength of the On-Us symbol is used as t he Xerox reference for the entire MICR line.

Measures character-to- c haracter vertical variation: measures skew

Generic MICR Fundamentals Guide 6-3

Quality control

MICR signal strength is the only magnetic specification in ANSI standards. Magnetic testers are needed to identify magnetic versus non-magnetic extraneous ink, and they can be useful in interpreting waveform uniformity issues. All other standards use optical dimensions and require optical or visual inspection.

MICR quality decisions cannot be based solely on magnetic test equipment without regard to ANSI standard conformance requirements. Refer to “Signal strength,” later in this chapter, for information on signal strength test specifications.

NOTE: Due to calibration, design, and manufacturing differences, signal strength readings from MICR testers vary to some degree, even when they are set up correctly and in calibration. These differences are caused partly by the different MICR characteristics of the printing technology that is used and partly by the magnetic read and write head design. If the test equipment is not in correct calibration, there are very large differences.

E13B calibration document

The E13B calibra tion docu ment is u sed to de termine if the MI CR tester is measuring the signal correctly. It provides a printed MICR character (On-Us s ymbol) calibrated by the manufacturer. The MICR character signal value, read by the master MICR reader, has been written in the space provided (see the following figure). All good cal ibrati on docume nts ha v e the notat ion “WCC,” reflecting calibration to the most recent ANSl standard. Calibration documents without this notation should not be used until their accuracy can be checked against a k nown good document.

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WCC notation

On-Us symbol used to calibrate a MICR reader

Figure 6-3. Portion of E13B calibration document

Quality control

Signal strength of On-Us symbol

below, as measured by a master MICR Reader

The calibration document shoul d be used once during each shift, or just prior to reading the On-Us signa l strength from an y output document. It may be used for a total of five hours in the MICR reader. When it begins to wear out, the value of the signal strength changes, and the document is no longer useful.

Testing sampl e documents

You should make every effort to detect problems in a MICR job before the documents enter circulation.

• Regularly monitor the printer output.

• Regularly run test do cuments that simulate production jobs.

• Thoroughly test all new MICR applications to detect design flaws.

• Take production samples while each MICR jo b is printing.

While a MICR job is running, operator inspection is required to insure the quality of the output. This inspection should include the following:

• At start of job: Horizontal position, vertical position, voids, spots, MICR line appearance, and MICR line content on at least seven sheets

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Quality control

• Periodically (once for each filled output bin): Horizontal position, vertical position, voids, spots, and MICR line appearance

When a clinical test is running—which many banks require before changing check production—the following additional design factors should be checked to provide a representative test:

• The Xerox printing system should be adjusted to manufacturer specifications and operator maintenance tasks performed regularly per the manufacturer's recommendation.

• Only paper stock that meets ANSI and Xerox requirements should be used.

• A large group of documents should be generated, several thousand at a time.

• Test documents must be fresh and undamaged.

• The test application should mimic the live data, but its appearance shoul d not resembl e a negotiab le document. The form should represent the correct document size, MICR line, and a unique serial number for each document for identification purposes.

• The test appl ication should be validat ed for skew, vertical alignment, and character size. (Any change in job resources may alter M ICR qua lit y para mete rs that do not normally v ary.)

Specifications for testing

The following specifications apply only to MICR characters that are printed within the clear band. Printing outside the clear band area should follow standard xerographic specific ations.

Note that most MICR line positional errors (horizontal, vertical, skew, and character) are due to poor document design rather than problems with the MICR printing system technology.

Horizontal position

To check horizonta l posi tioning, place the chec k a t the bott om of the MICR Gauge with the right edge of the check lined up with the right edge of the gauge. Place the right edge of the first transit symbol on the left between the dotted lines in boxes 42 and 43 of the gauge (see the following figure).

6-6 Generic MICR Fundamentals Guide

Acceptable MICR alignment

Quality control

Right edge of Transit symbols

Maximum allowable tolerance

Ideal horizontal alignment

Minimum allowable tolerance

Exceeds minimum allowable tolerance, too far to the right.

Unacceptable MICR alignment

Exceeds maximum allowable tolerance, too far to the left.

Figure 6-4. Horizontal position check using MICR Gauge

• If the right edge of the transit symbol is not between the dotted lines in boxes 42 and 43, the entire MI CR li ne is ou t of horizontal adjustment (too far to the left or right).

• If the MICR line is out of horiz ontal a djustme nt, b ut th e rest of the form is in the correct position, there is an error in the software program.

• If all printing on the entire document is out of horizontal adjustment, there is probably a registration problem.

Several documents should be checked before action is taken. Compare actual documents with prints of the diagnostic MICR line test pattern to help isolate printer and application software problems.

Vertical position

Check for the following types of vertical vari ation:

• Vertical variation from character to character

• Proper vertical placement of the entire MICR line on the document, or line vertical variation

Generic MICR Fundamentals Guide 6-7

Quality control

The bottom edges of adjacent characters within each field should not vary vertically by more than 0.030 inch/0.75 mm (ANSI), 0.015 inch/0.381 mm (ISO), and 0.007 inch/ 0.18 mm (CPA). Vertical variation occurs most often in the Amount field, which indicates an impact printer problem.

Use the MICR Gauge to measure character-to-character vertical position (see the following figure). Vertical variation from one character to the next is seldom produced by a Xerox MICR printing system unless the document has design problems.

Vertical charact er alignment section

Note the closer tolerance for

Canadian and Internati ona l stan dards

Align bottom of MICR characters on the document with center solid line

Figure 6-5. Vertical variation check using the MICR gauge

Vertical character alignment section enlarged

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Quality control

The vertical position for the entire line is evaluated with the MICR Gauge. To check the vertical position, line up the right edge of the check with the right edge o f the gauge , an d plac e the bo ttom edge of the check as far down as possible between the flexible and the hard plastic on the gauge. Notice if the characters are between the top and bottom lines of the character boxes. If the characters appe ar too high or too lo w (see th e fo llowin g figure), a software or a registration problem is indicated.

Entire MICR line too high

Skew

Entire MICR line properly centered vertically

Entire MICR line too low

Figure 6-6. MICR line vertical position

Skew is the rotational deviation of a character from the vertical with reference to the bottom edge of the document. The maximum skew or tilt of any character or line cannot be more than 1.5 degrees either way, using the bottom edge of the document as the horizontal reference.

Generic MICR Fundamentals Guide 6-9

Quality control

Character skew does not occur with Xerox printing systems. However, line skew may occur if the paper skews when passing through the printer or is poorly cut along the critical edge (see the following figure).

Out of specification

MICR line boxes

Bottom of document

Figure 6-7. Acceptable versus unacceptable line skew (figures are exaggerated)

To check for line skew, follow these steps:

1. Place the docume nt in the MICR Gau ge. Place the document so that the tops of all the MICR line characters touch the line forming the top of the MICR line boxes, (shown in the following figure).

Move document so the MICR characters

touch the top line of the MICR boxes

Top line of MICR boxes

Figure 6-8. Line skew on the MICR Gauge

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2. Hold the document firmly so that it does not slip. The bottom of the document should now bisect the vertical skew scales below boxes 10 and 46. The scales are graduated in 0.5 degree divisions fr om 0 (not m arked) to 2.5 deg rees (al so not marked).

3. Write down, to the near est deg r ee, where the document bisects the skew scales.

4. Subtract the smaller degree number from the larger. The remainder is the degree of line skew.

Line skew in excess of 1.5 degrees may cause characters to be out of the MICR vertical registration spe cification.

Character-to-character spacing

Character-to-character spacing is the distance from the right edge of one MICR cha racter to the right edge of the next. This distance is 0.125 inch/3.175 mm with a tolerance of ±0.010 inch/

0.25 mm. Each character box on the bottom of the gauge is

0.125 inch/3.175 mm wide, as shown in the following figure.

Quality control

Generic MICR Fundamentals Guide 6-11

Quality control

Figure 6-9. Character spacing

If it is possibl e to mo v e the chec k so that all char acter s are withi n a character box, place the right edges of as many characters as possible at the right edges of their character boxes.

Look at the entire line and notice any characters whose right edges are not touching the right edges of their boxes. These characters are more or less than 0. 125 inch/ 3.175 mm fro m their next closest character.

To find out how much mor e or le ss the spa cing is for a character, follow these steps:

1. Bring the suspected character into the character box containing the spacing tolerance zone, as shown in the previous fi gu re.

2. Line up the right edge of an adjacent character with the right edge of an adjacent box.

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Voids

Quality control

3. Look at the suspect character to see if its right edge falls between the two dotted lines defining the spacing tolerance zone.

If the right edge of the char acter f alls outsi de the do tted lines , it is outside the ±0.010 inch/0.25 mm leeway and is out of specification. It is also too close to, or too far away from, the character on it s right. Additio nal toler ances are required bet ween the fields in the MICR line to account for multiple printing steps.

If a spacing problem occurs, verify that the job was written correctly and tha t the correct MIC R fo nt wa s used. Small sp acing variations that accumulate over many characters affect MICR readability as long as the MICR line field boundaries are not violated. They are frequently the result of failure to properly specify character spacing or improper use of the spacing algorithm.

The absence of ink is called a “void” or “deletion.” Voids can be generated by excessive paper dust, a hardware problem, or excessive paper moisture. This problem occurs more often with cold fusion xerography and ionography technologies than with hot fusion based xerography (like Xerox MICR systems).

Voids must be contained within a 0.008 inch/0.2 mm square. An excepti on is made f or internal v oids th at e xtend ov er tw o or more zones of characters, a zone consisting of 0.013 by 0.013 inch/

0.33 by 0.33 mm square. For such a situation, a void must fit within a 0.010 by 0.010 inch/0.254 by 0.254 mm square. The squares on the MICR Gauge can be used to test this.

Single voids that are long, narrow, and predominately horizontal or vertical are called “needle” type voids. They are allowed in any length, anywhere in the character, provided they do not exceed

0.002 inch/0.05 mm in width. The combined areas of all voids in any vertical column or

horizontal row (nominally 0.013 inch/0.33 mm wide) must not exceed 20 per cent.

Generic MICR Fundamentals Guide 6-13

Quality control

Single voids

Acceptable

Not acceptable

Trail edge deletion (Note: This depends on the check printing orientation.)

Figure 6-10. Examples of voids

Extraneous ink spots

Extraneous ink s pots are unwanted bits of ink that result from unavoidable splatter and smear of the magnetic printing inks. These spots, which may be invisible to the unaided eye, can affect the wave patterns of MICR characters, depending upon their size, quantity, and position.

According to ANSI standards, any number of spots may be present within th e cl ear ba nd , if t hey are contained i n a 0 .00 3 by

0.003 inch/0.08 by 0.08 mm square. Random spots that are contained within a 0.004 by 0.004 inch/0.10 by 0.10 mm square are also permissible, but they are limited to one spot per character space and no more than f i ve in any one field.

There is one exce ption to this rule . On the bac k side of the page, any number of spo ts can be present w ithin the clear band area, if they do not exceed a 0.006 by 0.006 inch/0.15 by 0.15 mm square.

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Xerox DOCUPRINT 65, DOCUPRINT 115, DOCUPRINT 75MX, DOCUPRINT 155MX, DOCUPRINT 115MX User Manual

Specifications and Main Features

Frequently Asked Questions

User Manual

Table of contents

About this guide

Introduction

How to use this guide

1. Overview

A brief history

Why MICR?

Check printing capabilities

Check processing procedure

Production cycle of a check

Changes in check creation role

2. Environment

Types of MICR applications

Manufacturing checks

Issuing checks

Issuing turnaround documents

Printing financial forms

Xerox MICR printing systems

MICR printing technologies

Printer technical optimization

Typical MICR printing concerns

Paper guidelines

3. Paper facts

MICR paper requirements

Basis weight

Sheffield smoothness scale

Grain direction

Moisture content

Reflectance

Curl

Perforation

Metallic content

Stiffness

Cutting precision

Xero x paper

Paper maintenance

Wrapping factors

Storage factors

Temperature and humidity conditions

Paper runability criteria

Preprinted forms considerations

Inks

Security features

Duplication detection

Alteration prevention

Application design

Numbered stocks

Features to avoid

4. Document design

Check document content

Security features

Background printing

Fixed information

Date line

Amount lines

Payee line

Signature lines

Name of financial institution

Memo line

Account title

Check serial number

Fractional routing number

MICR line

MICR line (clear band) format requirements

Format specifications using E13B

E13B character set

E13B numbers

E13B symbols

On-Us symbol

Transit symbol

Amount symbol

Dash symbol

E13B character design

Field formats—E13B font

Document Specifications form

Amount field