MICR Toner: A History of MICR Toner

Have you ever wondered why checks have those markings in weird-looking character fonts printed to one side? Those markings are printed with MICR toner and they help banks make processing checks easier and less time-consuming.

MICR stands for magnetic ink character recognition. The MICR toners used for printing those characters are made from an ink formula containing iron oxide. The iron oxide component in MICR toners makes the machines able to read the codes printed on the check, thus allowing for the automation of their processing.

How did it come to be that banks need MICR toners? To understand why, we need to take a look at how checks used to be processed.

The use of checks as modes of payment for goods and services has been around for more than four hundred years. They were once known as goldsmiths' notes, drafts and bill of exchanges. The use of checks came to be because it was much safer and more convenient to carry a checkbook around instead of a bag of gold and silver coins.

However, as the usage of checkbooks became more and more popular, the banking industry as it was during the turn of the 20th century was faced with a serious dilemma. This dilemma is that it takes days, even weeks to get a check processed. Processing checks may literally have to mean sending couriers from coast to coast just to get it done. Issuing checks may have been more convenient than throwing gold coins around, but making sure that the checks go to the bank that they were supposed to go to is another matter.

In response to this problem, the Federal Reserve Act was enacted by the US government. The creation of twelve Federal Reserve Districts dramatically shortened the time for processing checks and made the usage of checks even more popular. This led to another, more serious dilemma - how to deal with volumes of checks issued per year, which numbered to billions.

In 1954, the American Bankers Association recognized the fact that it needed to implement measures to automate the processing of checks. It became necessary to find a mechanism that will enable checks to be read by a machine.

In 1956, the idea for the use of MICR technology, which makes use of MICR toner, was presented by Dr. Kenneth R. Eldredge of the Stanford Research Institute to the American Banking Association. The institute's research on MICR technology and MICR toners was heavily backed by the Bank of America and General Electric.

In 1958, a trial was conducted by the Batelle Memorial Institute in behalf of the American Banking Association to determine the fonts to be used for MICR printing using MICR toners. Fifty printers participated in the trial; what came out of this was the MICR font called the E-13A.

However, there was confusion experienced by the machines in differentiating between the number 8 and the symbol they used for "Transit." After a few tweaks, this led to the development of the MICR font E-13B. The E-13B font became the standard for printing checks using MICR toners in the United States.

In 1959, the use of MICR technology and MICR toners was implemented all throughout the banking industry.

It has been nearly 50 years since the use of MICR technology and MICR toners were first enacted, but banks still use them. As long as checks are in use, there will always be a need for MICR technology and MICR toners.