What is MICR?

Q: Why is it important to print with MICR toner?

As a check travels through the check clearing system, it passes through machines called reader/sorters.  As the check passes through the machine, the reader/sorter sends a magnetic charge to the check, which allows it to read the information contained within the MICR line very quickly...checks pass through a reader/sorter at a speed of 70mph!  The Federal Reserve and all banks require that checks be printed with MICR toner for ease of processing.  If a negotiable document is printed with regular toner, the reader/sorter will reject the check, forcing a manual process for clearing the check.  As a result the company who printed the check will be charged a fee per item rejected.  This consequence is the reason why it is important that companies print checks with MICR toner.

Q: How do MICR printers and toner save my company money?

A complete MICR printing solution utilizing secure MICR printers and MICR toner can eliminate the expenses and inefficiency associated with purchasing, storing, distributing and tracking pre-printed check stock. A MICR laser printer solution utilizes blank check stock, and has an immediate cost savings. Our secure MICR printer solutions virtually eliminate the risk of official check fraud - a $12 billion per year problem - as well as eliminate costs associated with maintenance on old equipment such as dot matrix printers. A secure MICR printing solution significantly reduces voids, missing checks and paid-unadvised charges while reducing non-value added activity. You can save up to $1.70 per item issued by your organization!

For every $100 spent on pre-printed check stock, it will cost a company approximately $15.00 in waste and $18.00 in distribution, for a total cost of $133.00.  The same amount of blank check stock will cost just $22.00 with no waste and approximately $2.00 in distribution, for a savings of 82% on check stock.

Q: What is the difference between Source Technologies' MICR toner and remanufactured MICR toner?

A remanufactured MICR toner cartridge starts as a regular toner cartridge.  It is emptied, disassembled, cleaned, reassembled and refilled with a MICR toner mix of unpredictable quality.  MICR dependability and performance quality issues are often related to the use of remanufactured MICR toner cartridges, resulting in poor reliability, printer damage, bank reject fees and other additional costs. 

Because remanufactured MICR toner cartridges cost less to purchase, companies may be tempted to purchase them in an effort to "save money."  It is important to know that the problems a remanufactured MICR toner can create (as indicated above) are far more expensive than the cost of a higher quality, originally manufactured MICR toner product.  

Source Technologies offers only originally manufactured MICR toner, and it carries with it a MICR Guarantee that ensures the quality of the documents printed using it with our MICR printers.  This guarantee cannot be found with a remanufactured MICR toner.   In addition, our toner cartridges typically offer twice the yield of remanufactured MICR toner cartridges, and a significantly lower cost-per-page, which is the true measure of a consumable cost.

Q: Can I use my standard printer and replace the toner with MICR toner?

No. Source Technologies' originally manufactured MICR toner cannot be used in a standard Lexmark or IBM mono-laser printer - it must be used in a Source Technologies- or IBM- branded MICR printer.

We guarantee the quality of our MICR products with our 3-year MICR Guarantee.  In order to offer this guarantee and protect our customers from the issues that occur so frequently when a poor-quality MICR toner cartridge is purchased from another manufacturer and marketed as a "Source Technologies MICR toner cartridge", we control the quality of the MICR solution.

By ensuring that our MICR toner cartridges are being used only in a quality Source Technologies- or IBM- branded MICR solution, our customers are assured that these problems will not occur:

• Bank rejects of checks (due to unreadable MICR lines) and fees associated with these rejects.
• Premature failure of printer components caused by abrasive toner formulations (typically the fuser) and/or toner leakage into the printer mechanisms.

Q: Can I use drop-in toner in a MICR printer?

Yes, but we strongly advise against this practice.  Source Technologies' printers offer more than 12 security features to prevent unauthorized printing, duplicate checks, or check-stock theft.  In addition, we offer a MICR Guarantee for the quality of the checks printed using Source Technologies MICR solution.

The use of remanufactured toner not only automatically voids this guarantee, but also voids the warranty on the printer itself because we cannot control the quality of the solution being used.  Poorly formulated / remanufactured toner causes poor MICR check quality resulting in rejected checks and higher costs for the bank or corporate customer. Using a drop-in toner solution can also cause premature failure of the fuser and other printer components.  Please refer to the answer to "What is the difference between Source Technologies' MICR toner and remanufactured toner?" (above) for more information.

Q: How can I deter check fraud by using MICR toner and printers?

The best way to deter check fraud is through a combination of efforts, including the kind of blank check stock and security fonts used, employee education, positive pay and a secure MICR printer solution.

The MICR printer solution plays a strong role in virtually eliminating the risk of check fraud because the customer is using blank check stock. It is "useless" to a criminal before it is printed on, unlike pre-printed stock, which can easily be accessed and manipulated. In addition, Source Technologies' secure MICR printer solutions utilize extensive security features to help secure the process from start to finish.  These features eliminate unauthorized access to the printer, fonts, check stock and even the datastream being sent to the printer.

Contact us directly to learn more about how our solutions fight official check fraud.

Q: Does it matter what check stock I use?

Yes! The quality of your MICR documents is dependent on the type of paper used. In addition to harming the adhesion of toner, a poor quality paper is more likely to get jammed in the bank reader/sorter equipment used in processing checks.

The following are paper guidelines we recommend to our customers:

• 24 lb. bond paper with a taber M.D. 2.5 and C.D. 1.1 minimum
• Rougher surfaces within the base printers' specifications for best toner fusing
• Either long or short paper grain. Overall performance in the banks reader/sorters is best when the grain direction is left to right when viewing the check.
• Micro-Perf (20 or more cuts per inch) perforations
• A moisture content between 4.7% and 5.5%. Storage conditions have a large effect on the final moisture content of most papers. Store your check stock in a cool, dry, environmentally stable and secure area. Protective wrappings should be removed just prior to use.

The use of paper-based security features such as void pantographs and laid lines is also recommended as a fraud deterrent.

Q: What are the legally required elements of a check?

• Date the check is written
• Amount of the check
• Name of person receiving check (Payee)
• Payor signature
• Payor's financial institution name

Q: What about recycled cartridges?

The MICR toner cartridge industry has a wide range of suppliers. There are a small number of firms with stringent cartridge and MICR toner quality control measures. Unfortunately most vendors use inferior toner formulations and poor quality cartridges that could damage your printer and print poor quality MICR documents.

MICR toner contains iron oxide which over time can eat away at toner cartridge components. If a cartridge is recycled, and the proper parts are not replaced, you run the risk of printer damage, print quality problems, and at the very least have wasted your money

We do not recommend using recycled MICR toner cartridges and suggest you pose the following questions to your supplier to ensure you are purchasing a quality product:

• What check reader/sorters have you used to verify durability of the MICR toner?
• What are the expected character signal strength readings throughout the life of the cartridge?

Poor quality toners also tend to flake or smear in the reader/sorter equipment used by financial institutions to process checks. This may result in extra charges from your bank.

Q: Where can I learn more about MICR?

• American Bankers Association: conferences, banking industry issues
• Bank Administrative Institute: research, conferences, publications
• American National Standards Institute
• X9: Accredited by the American National Standards Institute (ANSI), X9 develops and publishes voluntary, consensus technical standards for the financial services industry.
• NSSN: A National Resource for Global Standards, recent ANSI documents can be purchased from the NSSN web site.