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5912 Breckenridge Pkwy Suite B Tampa, FL 33610

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Frequently Asked Questions

Learn the answers to some of your most pressing questions about MICR technology, industry standards and how Check 21 legislation is affecting the financial industry.

Find out what MICR is, and how companies use MICR technology to secure their check issuance processes.

Do I still need a MICR printer to print checks?


Magnetic Ink Still Required on Checks The advent of Check 21 in 2004 brought significant change to check clearing in the United States. Now, more than a decade later, the US clearing process has seen a near 100% transition from the inefficient and costly paper check clearing to electronic image exchange.

Today’s Challenge Modern image-based processes have diversified image capture and the use of Optical Character Recognition (OCR) has risen. This has brought into question the need for magnetic, MICR, ink. MICR ink is still required for printing machine-readable code lines along the bottom of checks.

MICR, short for Magnetic Ink Character Recognition, is a core characteristic of the check and allows the data in the code line on the bottom to be captured magnetically and/or optically. Data on checks not printed in MICR cannot be magnetically captured and may require manual data entry. Even though check clearing continues to evolve Checks and Substitute Checks (IRDs) are legally required to include a magnetic code line in order to be treated as a “cash item”. Please refer to the following:

  • US Code for Federal Regulations (Regulation CC): Section 229.2 (u)(4)
  • Federal Reserve Operating Circular 3 (OC3)
  • Standard: ANSI X9.100-140, Image Replacement Document – IRD
  • Standard: ANSI X9.100-160-1, Magnetic Ink Printing (MICR)
  • Standard: ANSI X9.100-20, Print and Test Specifications for Magnetic Ink Printing (MICR))

What is MICR and How is it Used?


MICR (pronounced micker or miker) is an acronym for “Magnetic Ink Character Recognition” and is used to describe the characters and symbols at the bottom of a check. These characters consist of specially designed, standardized fonts that are printed with ink or toner that contains magnetic material.

As checks travel through the check processing system they pass through large machines called reader/sorters. Reader/ sorters identify the magnetic toner and, depending on the individual magnetic strength, it will recognize each character. These magnetic numbers and characters translate into “fields”.



It is a requirement that the fields on all checks be printed with MICR toner to ensure they can be efficiently processed. If the routing and account numbers are printed on a check with standard toner, the check will be rejected and the issuer will be subject to a fine per item rejected.

Who sets MICR standards?


MICR numbers conform to a strict specification set forth by both the American Bankers Association (ABA) and the American National Standards Institute (ANSI). These standards are periodically reviewed by the Accredited Standards Committee (ASC) X9 Financial Services (a committee given the responsibility of establishing and maintaining standards of MICR). Rosetta Technologies is a standing member of the ASC X.9B Committee on Paper Payment Systems.

Are There any Advantages to Using a MICR Printer Instead of a Regular Printer with Check Stock that has the MICR Line Pre-Printed?


Utilizing a MICR printer has many advantages over a standard laser printer with pre-printed check stock:

  • Because MICR printers print the MICR line directly onto the paper, they use blank check stock. This eliminates the expenses, inefficiencies and risk associated with purchasing, storing, distributing and tracking pre-printed check stock.
  • Printing on blank check stock ensures that your checks will not become outdated, like they could with pre-printed stock. For instance, if your company changed locations, or the bank account number changed, or the logo was updated, the pre-printed check stock would have to be destroyed.
  • MICR printers can print documents for all types of MICR and standard office applications such as loan coupons, depository transfers, starter checks, etc. Many companies utilize MICR for different types of applications that would require different pre-printed check stock and forms.

What's the Difference Between a MICR Printer and a Standard Laser Printer with Drop-In MICR Toner?


While it is possible to use a MICR toner cartridge in a standard printer, we strongly recommend against it. Because the MICR specifications are so rigid and a fee is imposed if the requirements are not met, choosing to print checks with a standard printer is a risky choice.

There is an intricate process that goes into re-engineering a standard printer for MICR application. The end result is a printer with additional quality assurance and security features that are geared specifically for printing MICR documents. These include:

  • E-13B Font: Rosetta Technologies creates this font for each individual printer, which ensures the highest achievable readability of MICR characters.
  • CMC7 Font: This font was designed specifically for use with Rosetta Technologies’ MICR printers to produce the highest achievable readability of MICR characters.
  • Low Toner Warning and Auto Stop: This feature senses toner level remaining in a cartridge, warns user of a low condition, and automatically stops printing when the toner reaches a level that could adversely impact MICR readability.
  • Paper Tray Locks: These locks make it impossible to access a paper tray containing check stock or other sensitive paper without a key.
  • Datastream Encryption: This feature sends secure, encrypted data from the host. The data is then received and decrypted by the printer. This helps to combat check fraud because it makes it impossible to intercept the print stream data.

In addition, Rosetta Technologies MICR printers include originally manufactured MICR toner. The toner and it’s cartridge or bottle is developed for each individual MICR printer. The MICR toner is formulated to ensure the printer’s engine performance, high print quality, excellent toner yield, and long fuser life.

Lastly, all Rosetta Technologies’ MICR printers include a MICR Quality Guarantee. The guarantee protects against fees imposed by banks for MICR performance or quality issues when the printer is used in conjunction with approved MICR toner and check stock and is continuously maintained under an approved Rosetta Technologies’ service plan.

Does it Matter what Check Stock I Use?


Yes, the type and quality of the paper you use is paramount to the long-term performance of your printer. Proper paper storage, handling and usage will contribute to trouble-free operation.

Current ANSI Standards X9.18, approved by the ABA, specifies that if 24 pound (90g/m2) paper is used (the recommended weight), then the grain direction used for checks may be either direction. Additional requirements to meet all current banking specifications are:

  • Sheffield smoothness between 120 and 150
  • Moisture content of 4.5%
  • Moisture-proof package wrapping
  • Avoid use of cut-sheet paper made from fan-fold stock
  • No ferromagnetic material contained in paper

Rosetta Technologies’ check stock, as well as other approved check stock, have been tested for use in all Rosetta Technologies MICR printers and is included in the MICR Guarantee.

Check 21 created many opportunities for financial institutions to transfer checks and other payments more efficiently. Find out what it is and how it's being used today.

What is Check 21?


The “Check Clearing for the 21st Century Act”, also known as “Check 21”, is a federal law that was enacted to create a more efficient and secure means for the processing and clearing of checks. Prior to it's inception on October 28, 2004, the check processing system relied on physically transporting paper checks from one location to the next. Check 21 encourages check truncation (the replacement of a paper check with a digital image) by removing the need to physically transport a check between banks. This decreases the processing times and transportation costs, while reducing the likelihood of items being lost or destroyed in transit.

Contact us today to see how Rosetta Technologies can help you find Check 21 Requirements.

What is a substitute check?


Because of Check 21, the bank of first deposit can now transfer a digital image of the check to the check processor and ultimately to the paying bank. If the paying bank is not fully image enabled, or is not able to process an electronic version of the check it can receive a paper version of the check called a substitute check (or image replacement document – “IRD”). An IRD (substitute check) is a paper replacement check created from the electronic image of an original paper check, and is the legal equivalent of the original check.

Because the IRD (substitute check) is a legal version of the original check, the financial institution has the option of either storing or destroying the original document once it has been captured electronically.

According to Check 21 guidelines, the substitute check must contain all of the information on both the front and back of the check, including the MICR line and all endorsements, and also states that it is a legal copy of the original check.

This is an example of an IRD:

Front



Back



Contact us today to see how Rosetta Technologies can help you find Check 21 Requirements.

Why would a bank use IRDs?


There are many reasons why a bank may chose to print IRDs. Because IRDs replace a physical check, they practically eliminate courier and transportation fees associated with sending a hard copy of a check. These cost savings can add up for large institutions.

Another benefit to eliminating the physical transportation of checks is the reduction in the amount of float. Since the files are transmitted electronically banks are able to process them much quicker than through traditional means.

Perhaps one of the largest motivations for banks to print IRDs is the ability to expand their customer base. Check 21 has created many opportunities for banks to leverage the technology for other purposes. The same technology can be used for merchant customers who deposit checks on a regular basis. Since the files can now be transmitted electronically banks no longer need to have a brick and mortar branch in proximity to their merchant customers. This creates an opportunity for banks to greatly expand their customer base and to create relationships with new merchant customers that wouldn't have been possible in the past.

IRDs create many other opportunities for banks to cut costs, expand their customer base and streamline their operations.

For more information about Check 21 Software please contact a Rosetta Technologies representative.

What do all the terms mean that are associated with Check 21 and IRDs?


  • Cash Letter: A “letter” that accompanies a bundle of paper checks sent from one financial institution to another, describes what’s in the bundle (# of items, $ amounts, etc.)
  • Electronic Cash Letter (ECL): Provides cash letter information PLUS the check images and data in electronic formats called X9.37 and X9.100-180 files
  • Bank of 1st Deposit (BOFD): The bank where the check is deposited
  • Intermediary (Federal Reserve or large bank): An intermediate recipient of checks for processing
  • Correspondent Bank: Provides services to other banks, including check processing services and IRD printing
  • Payor Bank: The bank that the check is drawn on (opposite of BOFD)
  • Forward Items (AKA “Day One”): Checks on their way to the payor bank
  • Return Items (AKA “Day Two”: Checks on their way back to the BOFD because of insufficient funds, unreadable check, or other reason

Contact us today to see how Rosetta Technologies can help you find Check 21 Requirements.

Check fraud is a multi-billion dollar a year problem for financial institutions and other companies. Learn about the different types of check fraud and come of the safeguards that every company should consider.

How does check fraud concern me and my business?


Check fraud costs American companies billions of dollars each year. This results in increased costs with your bank; through increased prices with your vendors. And, if your company becomes a victim, you pay significantly more in terms of the bottom line and your company's reputation with clients and consumers.

It's important to always remember -- check fraud doesn't just happen to the "other guy." Businesses, both large and small, have fallen prey to fraud perpetrators all across the U.S. However, your firm can practice prevention and easily enact safeguards against check fraud.

For many years, banks absorbed most of this expense. However, reforms in the Uniform Commercial Code place this responsibility on check issuers like you who now must practice due diligence and incorporate extreme measures in their check production. Rosetta Technologies understands the check security and cost control challenges your business faces every day. And we know what you can do about them.

The issuance of fraudulent checks poses a real threat to your company's financial security. But your bottom line isn't all that's affected. Your brand, your reputation, your image in the marketplace Ð all are at stake.

The first step in fighting check fraud is to call Rosetta Technologies to discuss your options in controlling costs and security associated with check production. There are many ways in which we can help you strengthen security, increase productivity, minimize check fraud and reduce operating costs while maintaining flexibility for your business

Why has there been an increase in check fraud?


The ABA attributes the increase in check fraud to the availability of sophisticated, low-cost technology, including laser printers and desktop publishing software programs. Color copiers have also provided a criminal element with the means to mass-produce any type of check in the market.

How does check fraud occur? And who are the principal "targets" of check fraud activity?


Check fraud occurs in a number of ways:

Checks are easily copied or otherwise reproduced, the amounts and payee information is changed, and the checks are cashed with phony identification cards or other media.

Gangs are highly involved in this activity and account for major fraud activities in larger metropolitan areas. Sometimes, they make as many as 40 to 50 bogus checks from a single "good check" copy with a valid signature and other corporate data and logo information on it.

Corporate payroll and accounts payable accounts are popular targets.

All types and sizes of companies, companies with remote offices, out of state or within the state, are targets. In other words, everyone!

Large banks are particularly hard hit, but fraud occurs in every size and type of business and in every size of bank.

How can I best protect the interests of my company against "check fraud?"


While there's no guaranteed method of protecting your company against check fraud, Rosetta Technologies has a solution - our MICR laser check printing technology plus software incorporating a high level of security. We also recommend that you:

General Safeguards

  • Contact your bank and ask for a written copy of their suggested procedures they expect you to follow regarding check fraud prevention, check stock considerations and check reconciliation.
  • Ask your bank for the written procedures, the "ordinary care" activities, which they implement to reduce check fraud.
  • Ask your bank if they have a "Positive Pay" program. Ask for the details of the program and the processing cost, if any. Some banks do not charge for "Positive Pay."

Internal Measures

Also consider the following internal procedures for implementation within your company:

  • Review your bank statements regularly; ensure that the authorized signers are not the same people who reconcile the account.
  • Review all hiring procedures. Utilize a background check for employees working in vendor assignments, check issuance or check reconciliation areas.
  • Ensure that at least two people are responsible for Accounts Payable.
  • Ensure that the mailroom personnel and procedures are sound.
  • Keep all check stock or cash equivalents in a secure and locked facility. Verity that tops and bottoms of check boxes have not been opened and then resealed.
  • Change keys or entry codes periodically to prevent routine access to storage areas.
  • Enforce mandatory vacation policies, particularly for those with financial access.
  • Conduct surprise audits.
  • Read and understand your bank contracts regarding liability, and your company's liability for fraud under the current Uniform Commercial Code (UCC) Regulations.

External Measures

  • Consider the following external procedures for implementation within your company.
  • Use bank services like "Positive Pay," expedited return information and signature verification systems to protect your Accounts Payable, Payroll and Accounts Receivable areas.
  • Purchase blank safety check stock or specially-designed check stock from established vendors or banks that offer this stock for your check printing operations.
  • Reconcile your check disbursements and deposits regularly.
  • If a payable amount is fraudulently used, close the account as soon as possible.
  • Be cautious when using refund accounts such as rebates for subscriptions. This is another target for check fraud, the checks are relatively easy to obtain and use.
  • Properly store or dispose of canceled checks and guard new checks. Do not disclose your checking account numbers to individuals you do not know, even if they claim they are from your bank.
  • Compare payroll checks with your current employee records.
  • Question funds that are transferred between bank accounts; verify new business vendors and the association with your company.
  • Review canceled checks and endorsements on a monthly basis.

What is the Uniform Commercial Code (UCC)?


The current UCC codes outline specific responsibilities for banks and companies to adhere to in handling check fraud cases. Due to the major increase in incidences of check fraud and associated dollar losses, these codes were updated in 1993. Since that time, the UCC has been adopted by all fifty (50) states. In the process, banks have been relieved of sole, 100% responsibility for check fraud; some of the burden of prevention and safeguards has shifted to businesses and corporations.



Rosetta Technologies is a revolutionary team of customers, employees, vendors, and partners creating and delivering innovative print technology and solutions to the market. Our mission is to translate this technology into MICR print solutions that transform your business and relationships with your customers.


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Rosetta Technologies

5912 Breckenridge Pkwy Suite B

Tampa, FL 33610


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