Date of Publication: January 2009

 PREFACE

Magnetic Ink Character Recognition (MICR) technology has been used by Canadian financial institutions for over four decades, to process – economically and expeditiously – a large volume of paper-based payment instruments on a daily basis.

Over the years, this Standard has been revised periodically to reflect growing knowledge, experience and advances in MICR technology. Most recently, specifications have been added to ensure that cheques and some other MICR-encoded payment items are designed in such a way as to permit the capturing of clear images. An explanation of testing procedures is contained in the Supplement to this Standard.

Document processing by image technology will not replace MICR processing. Instead, image and MICR technology will coexist as two equally important technologies for document processing. Electronic imaging of MICR-encoded payment items places new requirements on the overall design of these documents. Financial institutions and their clients must be assured that all essential information is readily legible when viewing the image of the payment item rather than the item itself.

The MICR and image requirements have been developed to achieve consistency in the evaluation of MICR-encoded and image-friendly documents, regardless of the financial institution conducting the evaluation. This should help printers produce documents that meet a common minimum quality level for all financial institutions.

1.         INTRODUCTION AND SCOPE

This Standard defines the location and background design of the necessary data element fields for imageable MICR-Encoded Payment Items and other MICR-Encoded Payment Items.

1.1       General Comments on MICR-Encoding

MICR printing requires a specialized skill and well-calibrated and maintained equipment.

High-quality MICR printing is important because it is read by machines and what seems relatively unimportant to the human eye (a small hole or void in one of the characters, for instance) is of vital importance to the machine.

The modern reader-sorter processes documents at high speeds, reads the magnetized MICR encoded character line and sorts these documents into selected pockets. Documents may be rejected by the machine as unreadable if, for instance, the document size does not meet the standards for MICR-sorting devices, the density of ink is too low or too high or if the magnetic signal level is out of specs. These rejected documents must be taken out of the stream and sorted and entered by hand.

The role of the printer is to produce documents that will process with a reject rate of less than 1%. In order to do so, the printer should acquire certain pieces of equipment to measure the MICR document “tolerances” described in this Standard and work closely with its client’s deposit taking financial institution (see Appendix V) to produce documents that meet the MICR specifications.

New specification sheets must be obtained prior to printing or reprinting documents (see Appendix III). Parties who print documents and who fail to comply with this requirement may be requested to reprint at their own cost.

1.2       General Comments on Image Technology

Advances in Optical Character Recognition (OCR) and Intelligent Character Recognition (ICR) have made it possible to improve the automation of MICR-encoded document processing by means of image technology. This technology can reproduce documents in a digitized format for highly efficient electronic processing and storage.

A document properly designed for imaging is one where all essential information can be captured by the imaging processes, the image will be usable, and the file sizes will be small enough so that the images can be stored and retrieved in a convenient manner.

The capture of paper-based documents is accomplished via a digital camera, normally loaded directly onto the reader-sorter machine. ICR may be used to read hand-written or machine printed amounts on the document image. Successful imaging and character recognition can be affected by many factors in the document design, including background color, screening, background pattern of the document, security patterns and the ink used to print the data. The effect of these design characteristics can be assessed by Reflectance and contrast measurements.

Cheques and other MICR-encoded Payment Items that do not conform to this Standard may risk processing delays and potential additional costs for members, printers and customers.

1.3       Tolerance Data

To attempt to interpret the tolerances acceptable by electronic sorting machines in terms of micro-measurements and to suggest that all printers measure these tolerances is considered to be a most impractical approach. For example, to suggest that a printer measure a horizontal distance .020 cm (.008") is a difficult request. Micro-measurements, for the practical use of the printer, must be interpreted in some other terms than centimeters, even though the tolerances required do fall within such dimensions.

Instruments help confirm your judgment. In matters of positioning, a gauge placed over a proof determines exactly the requirements of an area. In matters of size of characters and overall quality, a comparator provides an adequate check. To determine the proper reading by a sorting machine, you may use a tester to measure the signal strength of the ink on the document. Recognizing the practical and real limitations of measuring, it is highly recommended that samples of MICR-encoded documents be submitted to a Financial Institution’s Quality Assurance Department for testing.

1.4       Testing Equipment

A variety of testing equipment is available:

a)     Printing and layout gauges, which check position, skew, alignment, character location, etc…

b)    Pocket comparators with grids, which permit a check on character dimensions voids, edge irregularity and overall print quality.

More complex and more accurate equipment is available for shops with extensive document printing operations. These include:

a)     Signal level testers.

b)   Comparators (more complex than the pocket variety), which permit close inspection of quality factors, spacing, skew, voids, etc…

c)   Stereoscopic microscopes which provide a three-dimensional picture of the character image and surrounding areas to detect degree of impression or debossment, amount of squeeze-out and other factors.

d)   Reflectance scanners, which are used for measuring design and quality of Reflectance on documents; and

e)   Print Contrast scanners, which are used for measuring design and quality of Print Contrast on documents.

4.         SPECIFICATIONS FOR MICR-ENCODING

4.1       Machine Language

The machine language used is type E-13B. This consists of fourteen characters, ten digits and four symbols.

The ten digits are:  

The four symbols are:

     The Transit Number Symbol, which indicates to the reader-sorter the boundaries of the Transit Field.

  The On-Us Symbol, which indicates to the reader-sorter where to commence reading the Account Number or where to commence and finish reading the Serial Number Field.

  The Amount Symbol, which indicates to the reader-sorter the boundaries of the amount field. Printers will not use this symbol ordinarily but it is reproduced here for recognition purposes.

  The Dash Symbol, which is a divider or hyphen to the reader-sorter.

Note: For technical specifications of E-13B characters and magnetic ink, see Appendix I.

4.2       MICR-Encoding Area

Following is a detailed diagram of the 1.59 cm (5/8") MICR area, an important part of the document format. There are placement specifications governing the location of the encoded characters printed in this area.

The area containing the MICR band measures 1.59 cm (5/8") from the bottom edge of the document. In the MICR band, the use of magnetic ink is restricted to the printing of the prescribed E-13B characters. No printing shall appear anywhere in this area on the face of the document except the prescribed E-13B characters in the encoding line (see section 4.4). It is strongly recommended that the MICR band remain clear of background screening. Borders are not permitted within the 1.59cm (5/8") clear MICR band.

 No magnetic ink shall be printed on the reverse side of the document within the 1.59 cm (5/8") area along the bottom of the document.

For purposes of this Standard the right and left characters in any field are referred to as the opening and closing characters respectively.

4.3       Reference Edges

All measurements for the positioning of any element or space in the 1.59 cm (5/8") MICR encoding band must be taken from the right and bottom edge of the document. These edges are referred to as reference edges. These edges must form a right angle and be true in every way.

All horizontal dimensions are measured from the right edge, all vertical dimensions from the bottom edge.

Exception:

The left-most symbol of the left-most field must be .32 cm (1/8") or more from the left-hand edge of the document.

4.4       Fields or Areas of the Encoding Line

The band reserved for MICR printing is the 1.59 cm (5/8") area along the bottom edge of the document, and must not contain any other printing.

The lower edge of the encoding line should be at least .48 cm (3/16") above the bottom edge of the document and parallel to that edge. The next .64 cm (1/4") above provides the area where the encoding line appears. The remaining .48 cm (3/16"), making up the 1.59 cm (5/8") MICR band, remains clear.

Whenever adjacent fields are printed at different times or using different printing techniques, there must be a minimum of one blank space between those fields.

The encoding line is divided into fields as follows:

4.4.1 Amount Field

(Under normal circumstances, the printer will not be required to print in this field.)

Boundaries: No further left than 4.76cm (1⅞") from the right edge of the document. The right edge of the symbol appearing at the extreme right of this field must be .79 cm (5/16"), plus or minus .16 cm (1/16") from the right edge of the document.

4.4.2   On-Us Field

Boundaries: 4.76 cm (17/8") from the right edge of the document, continuing left to 10.80 cm (41/4") from that edge.

Eighteen (18) spaces are allotted for this field. There is no closing On-Us symbol for this field. Rather than considering the On-Us Field in terms of specific numbers of spaces, it should be viewed in terms of the maximum allowable dimensions.

If this information is printed at the same time and using the same printing technique as the Transit Number Field, the blank normally required between the On-Us and Transit Number Fields may be omitted.

The On-Us Field is divided into two sections as follows:

4.4.2.1 Transaction Code Section

This section deals with transaction codes applicable to imageable MICR encoded documents.

Subject to the exceptions listed below, the Transaction Code Section may be blank or consist of a maximum of four (4) digits located between the closing symbol of the amount field and the opening symbol of the Account Number Section. Where applicable, spaces should be provided to accommodate combinations of pre-encoded and post-encoded information.

Exceptions:

• Transaction code "45"1 shall be encoded on all U.S. Dollar Items drawn on a U.S.

Dollar account held with a member or drawn on the Canada Post Corporation, with the exception of paper

Pre-Authorized Debits, Items encoded with an ABA Routing Number, and certain other U.S. Dollar Items on which a CPA Member may encode a different transaction code;

• Transaction code 33 shall be encoded on Business Pre-Authorized Debits (PADs),

in accordance with CPA Rule H1;

• Transaction code 44 shall be encoded on Cash Management PADs in accordance with CPA Rule H1;

• Transaction code 83 shall be encoded on Funds Transfer PADs where no recourse is provided in accordance with CPA Rule H1; and

• Transaction code 81 may be required on Gift Certificates and Store Coupons in accordance with CPA Rule H2.

[Note: transaction code 05 is reserved for future use.]

Please see Appendix VII for a listing of all transaction codes for paper items reserved for CPA use. Consult the Quality Assurance Division of the CPA member (See Appendix V) for information on transaction codes applicable to certain categories of payment items.

4.4.2.2 Account Number Section

Customers who have their own documents printed must obtain Account Number Section information from their financial institution in the form of a specification sheet (see Appendix III).

The Account Number must be preceded by an on-us symbol. Individual CPA members will specify the number and positions of dash symbols and/or blanks to be used (see Appendix IV).

4.4.3   Transit Number Field

Boundaries: 10.80 cm (41/4") from the right edge of the document continuing left to 14.61 cm (53/4") from that edge.

The Transit Number Field always occupies eleven (11) spaces. All spaces in this field must be encoded. This field contains two groups of digits separated by the dash symbol. Reading from right to left, these groups are: institution number (three digits) and branch number (five digits).

The Transit Number Field must open and close with a transit number symbol.

4.4.4   Serial Number Field

Boundaries: 14.61 cm (53/4") from the right edge of the document continuing left to .32 cm (1/8") from the left edge of the document.

This variable length field is used for serial numbering. The maximum number of characters is fourteen (14) -- twelve (12) digits plus two (2) on-us symbols. This field must open with an on-us symbol and close with an on-us symbol. Blanks or dashes may replace one or more of these twelve digits. The closing symbol must be adjacent to the left-most digit. A Serial Number must be MICR-encoded in the Serial Number field on all imageable MICR-encoded documents.

If this information is printed at the same time and using the same printing technique as the Transit Number Field, the blank normally required between the Serial Number and Transit Number Fields may be omitted.

Customers should consult their financial institution Document Quality Assurance Department (refer to Appendix V) for information regarding the format and maximum number of characters in this field.

4.5       Positioning

The minimum distances of .64 cm (1/4") ± .16 cm (1/16") from the right edge of the document and .32 cm (1/8") or more from the left edge of the document are mandatory.

Horizontal positioning is subject to plus or minus .16 cm (1/16") either left or right of the field boundaries given.

The only maximum spacing restriction is two character positions between the Transit Number Field and the Serial Number Field.

Exception:

Floating Fields -- If the length of the document is such that there is insufficient space to print the Serial Number Field, then the On-Us, Transit Number, and Serial Number Fields may be shifted to the right. The maximum right shift allowed is such that the opening character of the On-Us Field will remain within its defined boundaries. This exception does not negate the standard that whenever adjacent fields are printed at different times or using different printing techniques, there must be a minimum of one blank space between those fields.

Customers must not use floating fields without the prior consent of their financial institution's MICR Quality Assurance Department (see Appendix V).

4.5.1   Alignment

The alignment of the bottom edge of any two adjacent numerical MICR characters must not vary more than 0.018 cm (.007") except between fields.

4.5.2   Character and Line Skew

The maximum skew or tilt of any character or line cannot be more than 11/2 degrees off vertical using the bottom edge of the document as a horizontal reference.

4.5.3   Spacing Requirements

The distance between the right average edges of adjoining characters is .318 cm (.125"), plus or minus .025 cm (.010") in the Transit Number and Amount Fields.

In the On-Us and Serial Number Fields, and between adjoining fields, the distance between right average edges can never be less than .292 cm (.115").

5.2       Security

Any security features that are to be applied to the front of an imageable MICR-encoded cheque or other payment item must not interfere with any of the following areas, prior to imaging or post imaging:

§   the 1.59cm (5/8") MICR clear band;

§   the date field;

§   the payee name;

§   the amount in figures field (i.e. the convenience amount rectangle and the dollar sign);

§   the amount in words field;

§   the CPA member name; and

§   the signature area.

Any security features that are to be applied to the back of an imageable MICR-encoded cheque or other payment item must not interfere with the following areas, prior to imaging or post-imaging:

·          the teller stamp box;

·          the endorsement area;

·          the “Verification Phrase” (i.e. “Back/Endos”; “Endos/Back”; “Back/Verso”; “Verso/Back”;

“Verso”; or “Back”); and

·          the 2.54 cm (1”) area from the aligning edge.

“Void” pantographs and other hidden pantographs that are intended to appear on copies as a security measure to prevent fraudulent duplication must not be visible on either grayscale (120 dpi) or binary (i.e. black & white) (200 dpi) images captured from original cheques or other payment items.

5.3       Populating the Data Elements

Computer-Generated Payor Filled Fields

·       Systems that use computer software to populate the mandatory Date Elements or the Legal Amount shall utilize fonts for these fields which are no less that 10 point in size (see Figure A) and shall use image-friendly inks: black, blue or dark purple.

·       Slanted and/or italicized formats of these fonts should not be used.

·       In the event a proportional spaced font is used, the design of the font shall not cause the characters to be tightly spaced so that the recognition system cannot easily separate each character.

·       In no case shall the amount be printed using a reverse font where the background of the printing is black and the character itself is not printed. Inverse printing shall not be used for printing in any areas of interest (as defined in Sub-Section 2.2)

·       Asterisks may be used in the convenience amount rectangle and shall only be printed immediately preceding the amount in figures (i.e., $*****45.00 or *****45.00$). The use of asterisks in any other position in the convenience or payable amount field is not permitted.

·       Asterisks may be used in the legal amount field (i.e. amount in words) and shall only be printed to the left of the amount in words (i.e. *******forty-five dollars). The use of asterisks in any other position in the legal amount field is not permitted.

·       Symbols other than asterisks are not permitted in the convenience amount rectangle.

FIGURE A – FONT SIZE SPECIFICATIONS