BOSTON The Federal Reserve announced Wednesday that it will adopt a single standard for magnetic ink character recognition detail on checks by mid-2005.
A standard MICR data format is expected to aid in the conversion of paper to electronic payments, since one of the chief obstacles to conversion is a lack of uniform exchange standards.
We need a set of standards that provide maximum opportunity for efficient interchange of check payments, said Patrick Barron, the first vice president of the Federal Reserve Bank of Atlanta.
The Fed presently supports about 70 different formats across our 45 check processing sites. We simply must free ourselves from the burden of multiple formats.
MICR detail allows banks to credit, sort, and pay checks written by businesses and consumers.
The detail on the paper check must be read by machines to be converted to an electronic payment, a process made easier by a uniform standard.
The Federal Reserves adoption of a single standard for MICR detail transmission will conform to the ANSI ASC X9.37 format. The Fed plans to issue a user and implementation guide in 2002 and will also host a software vendors conference next year.
