MICR laser check printing is better and cheaper.

Technology advances in magnetic ink character recognition desktop laser printing have yielded standalone systems that are ideally suited for many industries.

These systems are the perfect vehicle for distributed check and negotiable document printing, and are quickly gaining a foothold in the banking industry due to the increased quality of their output, their positive effects on productivity, and the high degree of security and control that they provide. Documents can be efficiently handled by these systems, representing a significant improvement over traditional methods.

Magnetic ink character recognition desktop laser printing systems provide a streamlined, high-volume method to print high-quality checks, drafts, and other negotiable documents accurately in a single pass. In contrast to the traditional method of check printing, laser check-printing systems are less costly, offer higher security, and are speedier and more efficient. In essence, these systems can have a significant impact on the way financial institutions do business.

For example, when Texas Commerce Bancshares of Houston needed a more efficient system for trust disbursement after acquiring First City banks and Ameritrust Texas Corp. last year (check processing volumes grew from about 6,500 to well over 30,000 monthly), it chose to implement Xerox 4197 MICR desktop laser printers.

"With the 4197s, we're able to provide superior customer service by getting high quality trust checks out the door much more quickly," according to 14-year banking veteran William G. Glover, assistant vice president and trust officer, who is responsible for trust accounting and related systems.

Traditional methods for manufacturing and issuing checks require a number of steps. First the fixed graphic elements on the checks and forms must be designed and printed. Next any fixed text or logos, customized for each account, are printed. An additional process is then required to print the MICR line code using magnetic ink. From the moment the checks are MICR encoded, security becomes paramount since the documents are now negotiable. This typically involves bonded delivery and high-security warehousing - a considerable task given the large quantities usually produced to achieve economies in printing.

Before they can be used, preprinted checks must then be transferred from secure storage employing proper audit controls to record the serial numbers of the checks being removed. Next, variable data such as date, amount, and other information is printed on the checks using an impact printer. The final steps include form bursting, decolating, trimming, and signing the checks.

Every step of this process presents a potential opportunity for errors, fraud, and damage - especially those steps where mechanical devices are employed. Misprinted or damaged checks must be recorded, voided, and destroyed before they can be reissued. In addition to its complexity, this process moves Slowly and each employee and step adds to overhead. The cost of security alone can be enormous, given the complexity of this process and the bulk of warehoused negotiable documents.

Other costs include the necessity of destroying stocks of preprinted forms and checks that become obsolete.

With the advent of MICR laser printers, the benefits of laser-based document creation are now. being applied to the production of negotiable documents. Current laser-based MICR printers are specially designed to meet the requirements of check and negotiable-document printing applications. Some MICR printers have provided improvements in the paper path to increase registration accuracy of the MICR line. In addition, MICR toner technology has been enhanced to produce consistently readable MICR lines. At 300 dots per inch, most MICR desktop laser printers can easily digitize the American Banking Association's E13B MICR line so that it meets both the ABA and American National Standards Institute's stringent specifications.

Today's crop of MICR desktop laser printers using off-the-shelf or custom-designed software form a complete system that can simplify the entire document-creation and cash-management process while maintaining or improving on existing security requirements. A typical standalone printing system can print everything required on a check - including the company logo, account or draft number, invoice or claim number, MICR line, and signature - all in one pass, using blank (non-negotiable) security paper.

Should there ever be a problem and a check becomes damaged, MICR laser printers allow users to reprint voided documents with identical serial numbers so that changes in the check register are not required.

While the initial cost of MICR toner is slightly higher than regular laser toner (they are not interchangeable), average yield per pound is comparable. According to Mr. Glover of Texas Commerce Bank, his department now spends about $35 to purchase 1,000 sheets of top-quality MICR laser bond paper with maximum security features, as opposed to $70 spent previously for 1,000 pieces of two-pan, continuous-form preprinted checks.

The many benefits of MICR desktop laser printing systems ultimately yield lower costs to the user, which makes it easy to justify their purchase. One of the most obvious benefits is higher quality. Since all the information on the check is printed at high resolution, the final output is both uniform and consistent. Checks printed on a MICR laser printer physically look better than those produced using traditional methods. In addition, the MICR toner is remarkably durable. Using a ferromagnetic dry ink, MICR laser printers produce an indelible image that will not crack, peel, or scratch off even when the documents are folded or damaged through rough handling.

The high quality MICR desktop laser printers yield negotiable documents with a significantly low rejection rate - in some cases, near zero.

The laser-based MICR printers also directly affect overhead costs in two ways. For starters, they eliminate the need to produce and store large quantities of preprinted forms and check stock. Users only need to stock blank non-negotiable security paper, which can be used with virtually any MICR desktop laser printer. A well-known East Coast financial services and insurance company has reduced its preprinted check stock inventory from 37 forms to two by adopting MICR laser printing systems, representing an estimated savings of $150,000 annually. The major benefit, though, is the simpler overall process for producing checks. The use of MICR desktop laser printing systems reduces the number of production steps to one, compared with the multiple steps required for the traditional approach.

Security also becomes much more manageable. There are fewer steps and, hence, fewer opportunities for fraud when using MICR desktop laser printers. In addition, warehousing and transportation of negotiable documents is no longer necessary, since the check production process is distributed to the location where they are required.

"It's virtually impossible for someone to do anything fraudulent with a blank piece of security paper, whereas a preprinted check can become live very easily," observed Mr. Glover, the Texas banker. "There's no need to log in the security paper, or to keep it under the dual control of two or more employees."

A significant increase in productivity and lowering of overall costs is also experienced by users as a result of decentralizing the check-printing process. One Midwest insurance company reported that its overall costs were reduced from 13 cents a draft to two cents. Given that this company produces 250,000 drafts each day, the savings are truly significant.

A distributed check production system using MICR desktop laser printers can also directly affect the level of service provided by a company - with a positive net effect on customer satisfaction.

In conclusion, given the amount of money and time spent each year using traditional methods of producing negotiable documents, MICR desktop laser printing systems are a vast improvement.

Offering a reduction in overhead costs, increased quality, a streamlined production process, and added security features, these systems can have a definite impact on a company's bottom line.

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