Magnetic Ink Character Recognition (MICR) Line?

Magnetic ink character recognition (MICR) is the line of numbers that appears at the bottom of a check. The MICR line is a group of three numbers, which are the check number, account number, and bank routing number. The MICR number includes the magnetic ink character recognition line that’s printed using technology that allows certain computers to read and process the printed information.

Key Takeaways

  • Magnetic ink character recognition is the line on the bottom of a personal check that includes the account, routing, and check numbers. 
  • MICR numbers are readable by individuals and computers, where its special font helps limit check fraud. 
  • MICR benefits include quickly facilitating routing information and making it difficult to alter checks. 

How the Magnetic Ink Character Recognition (MICR) Line Works

The MICR number is used mainly by the banking industry. A benefit of MICR over other computer-readable information such as bar codes is that humans are able to read MICR numbers. The two MICR fonts that are used worldwide are E-13B and CMC-7. These unique fonts are used to help computers recognize the characters and limit check fraud.

The MICR number allows computers to rapidly internalize a check number, routing number, account number, and other numbers or information from printed documents, such as a personal check. The MICR number, which is sometimes confused with just the account number, is printed with magnetic ink or toner on a check, usually in one of two major MICR fonts. The magnetic ink allows the computer to read the characters on a check even if they have been covered with signatures, cancellation marks, or other marks.

Benefits of MICR Line 

One of the benefits of the magnetic ink character recognition line is its ability to quickly facilitate the use of routing numbers. A routing number (or routing transit number) is a specific nine-digit numerical code, which banking and other financial institutions use for the purpose of clearing funds and/or processing checks in the U.S. As it appears on the front of a check check, the routing number represents the bank that holds the account from which funds are to be drawn. Wire transfers and direct deposits often rely on routing numbers.

Unfortunately, fraud happens throughout the financial services industry. The definition of fraud is an intentionally deceptive action, designed to provide the perpetrator with an unlawful gain. A range of fraud types exist, including tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud.

The magnetic ink character recognition line can help prevent financial fraud through the use of its special magnetic ink and unique fonts. For example, MICR makes it challenging to alter checks. An altered check is when someone intentionally and materially changes the name of the payee or the amount of the check.

The Uniform Commercial Code (UCC) Section 3-407 breaks down the term alteration even further. The UCC is a set of business laws that regulate financial contracts. Nine articles deal with separate aspects of banking and loans.