Inspired by this thread about how good optical character recognition for checking has gotten, I was wondering if there are any plans to get rid of MICR entirely on checks. Do most banks still rely on MICR or have they switched over to OCR to read the info printed in MICR? I suspect that the reliability of OCR now exceeds that of MICR (Is anybody trying to to improve MICR?).
I work for a check processor firm although I deal many with building checking statements and the like. The issue here is not that there isn’t better technology, it is that banks are notoriously cheap and tight. I suspect that MICR will disapear sooner rather than later because the magnetic ink is bloody expensive, but not because banks will jump to spend an extra dime.
I’m sure there are small local banks here and there that still rely on the old magnetic MICR machines. They’re simple and they work, so why not?
But the vast majority of big banks have gone to OCR for the MICR, so they don’t rely on having the special magnetic ink. The nice thing about that is you can print checks on your computer if you want. (Well, you could always do that, it just means that if it went through an old-school MICR machine it would be rejected and they’d have to route it by hand.)
We service mostly small community banks and credit unions and MICR is very common. I will ask our print guys how common.
The biggie here is federal law and the ABA- consistent MICR specs were required for physical check sorting/processing and the Federal Reserve played a large role in processing checks. They’ve virtually eliminated that arm since everyone’s gone to image, but as long as the Fed is still doing it, the specs won’t change.