Magnetic ink character recognition (MICR) technology is has been into existence since 1950. It is predominantly used by the banks and other financial institutes for streamlining their clearance processes for cheques, bank drafts and deposit slips. The MICR technology was developed by General Electric Laboratory and Stanford Research Institute. It basically uses a magnetic ink or toner to print machine readable characters. Banks use this technology to print information such as cheque amount, account number, bank code and cheque number. Moreover, unlike technologies such as barcodes, MICR printed characters can be easily read by humans with their naked eye. The MICR technology has advantages such as high security, low deciphering error rate and high compatibility with existing computing systems. These advantages help in expediting the processing of documents.
The MICR character printing device basically consists of specialized magnetic ink which generates magnetic signals during the reading process. Such magnetic ink is generally available in ribbons or toners used for laser printing. The standard font adopted for MICR printing is MICR E – 13B, however, in Europe the most widely used font is CMC – 7. Several financial organizations such as American Bankers Association, BAI and American Standard Committee X9, Inc. have given standards for positioning of MICR characters on the documents. American National Standards Institute (ANSI) implements and manages the standards for MICR printing. ANSI has set up standard for font of MICR characters, registration of MICR, toner adhesion and moisture content on the paper for MICR printing.
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The characters written on the financial documents with MICR technology are readable by reader sorter machines. These machines read each MICR characters from right to left to recognize the shape and magnetic waveform of every individual character. The waveforms are of unique shape that creates valleys and peaks within the waveform. The peaks and valleys created are read by the waveform reading technology installed in the MICR reader. The recognition technologies incorporated in reader sorter machines include waveform reader sorter, matrix reader sorters, optical reader sorters, dual magnetic reader sorters and hybrid reader sorter. Hybrid reader sorters use two reading technologies, namely, magnetic waveform recognitions and optical character recognition. The MICR readers identify the magnetic ink used for printing information on the cheques and verify its authenticity. This encourages the retailers and insurance firms to identify any fraud related to forged cheques and identify the legitimacy of the cheque. In addition, the MICR devices encode and decode information for deposit tickets, coupons, travel tickets, receipts, credit cards, application forms and others.
MICR market is primarily driven by the increasing number of branches of banks and financial institution across the globe. Additionally, the rising demand for further optimizing the cheque processing speed is fueling the growth of the market. Moreover, the ability of MICR devices to verify the authenticity of financial documents is encouraging the financial institutes to opt for MICR devices. However, the growth of MICR devices market is hindered with the reduction in use of cheques due to increasing demand for online money transaction across the globe. The high cost of MICR devices such as printer, toners and readers is also challenging the growth of the market, as other modes of transactions are proving to me more economical and user-friendly. In addition to this, the systems designed for reading and printing MICR characters accept very less characters. As a result, the scope for the use of MICR is restricted.
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Some of the key players in the magnetic ink recognition devices market are Troy Group, Inc., ACOM Solutions, Inc., Rosetta Technologies, Inc., Epson America, Inc., Hewlett Packard Company, MagTek, Inc., Uniform Industrial Corporation, Xerox Corporation Ltd. and Canon, Inc.