MICR
(Magnetic Ink character Recognition) was developed to utilize
the benefits of computer technology in the banking industry.
Prior to the use of a MICR line check sorting by account number
was a manual process. Two systems were previously used to
handle the large numbers of checks processed in the banking
industry -- "Sort-A-Matic" and "Top Tab Key
Sort."
Sort-A-Matic
included 100 metal or leather dividers numbered 00 through
99. Each check was placed in the corresponding divider by
the first two numbers of the account. The sorting process
was then repeated for the next two digits of the account
number, etc. When the process was complete, the checks were
grouped by account number.
Under
the top Tab Key Sort System, small holes punched at the
top of the checks indicated the one's, ten's, hundred's,
etc. digits. A metal 'key' was inserted through the holes,
thereby separating all the checks with a corresponding 100's,
200's, etc. This step is repeated for each digit until all
the checks were sorted.
Both
of these systems worked, but were time-consuming. With the
advent of the computer and its movement from the laboratory
into the business world, a sorting and matching task seemed
ideal. Stanford University and Bank of America were the
first to successfully use computers to sort and match checks.
They developed what is now known as MICR (Magnetic Ink Character
Recognition).
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