MICR toners have been around for fifty years. Their development sprung from a serious need to revolutionize the banking industry and the way they process checks. Checks themselves have gone through a long period of changes in the last four hundred years, and the use of MICR toners was among the latest updates in its history.

How did MICR toners come about and what is its role in the development of the way we use checks? The answer lies in the development of the checks themselves.

The Goldsmiths and the Use of Checks

Before there was any paper money, much less checks, there was gold and silver. Gold and silver coinage was used as currency, and people carried some along whenever they needed to shop for goods and services. However, carrying coins around could be cumbersome, not to mention dangerous. Highwaymen were only too happy to accost innocent travelers and make off with their coins.

So, in the 1600s, goldsmiths appeared in England and in Europe. These goldsmiths functioned a little like how banks work these days. People deposited gold and silver with them in exchange for notes of credit. Notes of credit were also called goldsmiths' notes, drafts, and bills of exchange. These were the first checks that people came to use.

The California Gold Rush

The California Gold Rush during the mid-1800s also posed the same problems. Trains transporting gold and silver were attacked by robbers. In order to stop this, companies like the Wells Fargo & Co., which operated a coach line that transports gold, established a state bank chartered in California. Through the bank, they issued checks instead of transporting gold.

Because checks were becoming popular by the 1900s, the Federal Reserve Bank Districts were established to shorten the clearing and processing time of checks. With the time to process checks shortened by this development, the new challenge of handling and sorting checks emerged.

The Birth of the MICR Toner

By the 1950s, the American Bankers Association recognized the fact that it is becoming difficult to process volumes upon volumes of checks through manual handling and sorting. There was a need to automate the process completely. And so, the MICR toners came to be.

In 1956, as part of the commission to address the automation of check processing, Dr. Kenneth R. Eldredge of the Stanford Research Institute (SRI) made a study on what is now called as Magnetic Ink Character Recognition, or MICR. The use of MICR toners made checks readable by the machine as well as the human eye. Another thing that made MICR toners beautiful is that their formulation was mixed with iron oxide. Iron oxide makes it possible for machines to read the ink of MICR toners still, despite anyone writing over them or making markings or stamps.

The SRI, General Electric, and the Bank of America were in the front lines of the development of the MICR technology and MICR toners. The U.S. patent for the technology was later given to General Electric.

The final format of the fonts to be printed using MICR toners was the work of Batelle Memorial Institute, which the American Banking Association asked to administer the trial of the fonts to be made by 50 individual printers. This process gave birth to the E-13B font typically associated with checks and MICR toners.

By the 1960s, the use of MICR fonts printed with MICR toners for processing checks have become standard all over the world. But because imaging and online banking has created another revolution in the banking industry, it would not be surprising to see further changes in the development of MICR toners and MICR technology in the years to come.