MICR Toner - The Development of Checks Created the Demand For MICR Toner

How the Need for the MICR Toner Came to Betime of checks. With the time to process checks
MICR toners have been around for fifty years.shortened by this development, the new challenge
Their development sprung from a serious need toof handling and sorting checks emerged.
revolutionize the banking industry and the wayThe Birth of the MICR Toner
they process checks. Checks themselves haveBy the 1950s, the American Bankers Association
gone through a long period of changes in the lastrecognized the fact that it is becoming difficult to
four hundred years, and the use of MICR tonersprocess volumes upon volumes of checks through
was among the latest updates in its history.manual handling and sorting. There was a need to
How did MICR toners come about and what is itsautomate the process completely. And so, the
role in the development of the way we useMICR toners came to be.
checks? The answer lies in the development ofIn 1956, as part of the commission to address
the checks themselves.the automation of check processing, Dr. Kenneth
The Goldsmiths and the Use of ChecksR. Eldredge of the Stanford Research Institute
Before there was any paper money, much less(SRI) made a study on what is now called as
checks, there was gold and silver. Gold and silverMagnetic Ink Character Recognition, or MICR. The
coinage was used as currency, and people carrieduse of MICR toners made checks readable by the
some along whenever they needed to shop formachine as well as the human eye. Another thing
goods and services. However, carrying coinsthat made MICR toners beautiful is that their
around could be cumbersome, not to mentionformulation was mixed with iron oxide. Iron oxide
dangerous. Highwaymen were only too happy tomakes it possible for machines to read the ink of
accost innocent travelers and make off with theirMICR toners still, despite anyone writing over
coins.them or making markings or stamps.
So, in the 1600s, goldsmiths appeared in EnglandThe SRI, General Electric, and the Bank of
and in Europe. These goldsmiths functioned a littleAmerica were in the front lines of the
like how banks work these days. People depositeddevelopment of the MICR technology and MICR
gold and silver with them in exchange for notestoners. The U.S. patent for the technology was
of credit. Notes of credit were also calledlater given to General Electric.
goldsmiths' notes, drafts, and bills of exchange.The final format of the fonts to be printed using
These were the first checks that people came toMICR toners was the work of Batelle Memorial
use.Institute, which the American Banking Association
The California Gold Rushasked to administer the trial of the fonts to be
The California Gold Rush during the mid-1800s alsomade by 50 individual printers. This process gave
posed the same problems. Trains transporting goldbirth to the E-13B font typically associated with
and silver were attacked by robbers. In order tochecks and MICR toners.
stop this, companies like the Wells Fargo &By the 1960s, the use of MICR fonts printed with
Co., which operated a coach line that transportsMICR toners for processing checks have become
gold, established a state bank chartered instandard all over the world. But because imaging
California. Through the bank, they issued checksand online banking has created another revolution
instead of transporting gold.in the banking industry, it would not be surprising
Because checks were becoming popular by theto see further changes in the development of
1900s, the Federal Reserve Bank Districts wereMICR toners and MICR technology in the years to
established to shorten the clearing and processingcome.