What Is Magnetic Ink?

Magnetic ink has a long history of use in the banking industry. Think of check numbers, account numbers and other special numbers at the bottom of checks. They are all printed with magnetic ink and can be read by machines that use MICR (magnetic ink character recognition) technology. Private companies, government agencies, financial institutions and other organizations can now take advantage of the security and reliability of this special ink.

TL;DR (Too Long; Didn't Read)

Magnetic ink can be read by both humans and magnetic ink character recognition machines. It is widely used for its ability to prevent check fraud.

How Does Magnetic Ink Work?

MICR technology has been around since the 1950s. As the number of paper documents processed by banks increased, so did the demand for technology. Processing checks manually was no longer an option. With MICR, this time-consuming task became automated. Bankers switched to machines that were able to scan and record the information on checks within seconds.

At the core of this technology is magnetic ink, which can be read by both humans and machines. This black ink is water based and contains particles of a magnetic substance. It's mostly used by banks for printing checks, but it also has a number of applications for retailers and other businesses. Vouchers, for example, can be printed with magnetic ink to prevent fraud.

Magnetic Ink Vs. Magnetic Toner

As a business owner or bank manager, it's important that you know the difference between magnetic ink and magnetic toner. First of all, ink comes in liquid form and consists of tiny particles in the nanometer range. Magnetic toner, on the other hand, is a dry powder and contains small particles in the micrometer range.

Another difference between the two is that magnetic ink absorbs and dries into the paper, while magnetic toner melts and adheres onto the paper surface. Both products have a similar shelf life of approximately 12 months.

Compared to regular toner, magnetic toner can form MICR characters. It's widely used by individuals and businesses that want to print their own checks. Both the ink and toner require laser printers. If you want to create your own checks, you'll also need a software program for formatting the check as well as special paper and MICR fonts.

The Advantages of Magnetic Ink

Magnetic ink is widely used for its ability to prevent check fraud. The documents printed with this type of ink are difficult to forge, providing increased security. Additionally, MICR technology requires no manual input, so it has a significantly lower error rate compared to other character-recognition systems.

Checks are often roughly handled, folded and overstamped. Even so, the special characters printed with magnetic ink can still be read. This technology provides greater efficiency and faster processing speed of checks. Thanks to it, banks and financial institutions are now able to handle billions of checks annually.

In 2016, 75 percent of companies experienced check fraud. Businesses can use MICR readers to check the validity of checks. This helps reduce the risk of financial loss through counterfeiting. Furthermore, you can use magnetic ink to print your own checks. It's a simple, effective way to save money, increase brand awareness and reduce the risk of potential errors.

Are There Any Drawbacks?

Like everything else, magnetic ink and MICR are not perfect. First of all, this is the most expensive form of data entry. Secondly, MICR machines can only recognize four special characters and 10 digits.

The costs can be high for those who wish to print their own checks. They must purchase check stock, MICR font and specialized software in addition to magnetic ink and laser printers that accept magnetic toner. Be aware that processing errors may occur, and your checks may be rejected if your fonts don’t meet the standards set by the American National Standards Institute.

MICR readers come with a high price tag too. Expect to pay $262 to $1,024 and up. If you're a small business owner, printing your own checks or using a MICR reader will result in additional expenses.

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About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.