The American Bankers Association and the Rise of MICR Toners

The American Bankers Association has been in the forefront of any major developments in the banking industry of the United States since its inception in the 1840s. Many of the processes and procedures that have modernized the way we do banking today were the result of the initiative of the American Bankers Association. One such procedure is the method used for processing checks, which involves printing using MICR or magnetic toners. MICR toners came to be because the American Bankers Association made it so.

A Background on the Invention of MICR Toner

Checks have been in use for hundreds of years. The first checks came out in the 1600s, although they were not called checks yet back then. They were called goldsmiths' notes, bill of exchange or drafts. Checks made it convenient to carry money around.

But although checks have been around for a long, long time, it was only at the turn of the 1900s that issuing checks became popular. Because having a checkbook is more convenient than carrying money, more and more people opted to open checking accounts and issue checks.

The banking industry, however, was unable to cope with the growing volume of checks being issued. It took days for the processing of a single check to be done. The banking industry recognized the need to automate the way checks are being handled, and so in 1954, the American Bankers Association formed a commission to look into possible ways of automating check processing. This eventually led to the invention of MICR toner.

The Path to the Development of MICR Toners

The American Bankers Association began to work closely with the Stanford Research Institute for any automation solutions that the Institute could come up with regarding the problem faced by the banking industry. The Institute then came up with MICR technology; MICR stands for magnetic ink character recognition.

Printing fields on checks using MICR cartridges can make the checks easily readable by both a machine and the human eye. However, the beauty of printing with MICR toners is that the machine could still read what was printed out on the check even though there are other writings on the check, or if the check has been stamped.

The idea for the use of printing fields on checks using MICR was presented by the Stanford Research Institute to the American Bankers Association in 1956. The fonts to be used for printing checks with MICR toner underwent a trial administered by the Batelle Memorial Institute in 1958. Around fifty private printers participated in this trial. Out of this trial came out what is now known as the font E-13B, the standard font used for printing with MICR toners on checks. The American Bankers Association then enacted the implementation of MICR printing, and through the 1960s, it became standard among banks to print fields on checks using MICR toners.

Clearly, the reason why we use MICR toner nowadays is because the American Bankers Association saw the need to modernize the way checks are being processed. This modernization significantly made it even more convenient to use checks in our day-to-day financial transactions.

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