What is a MICR or check reader?

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MICR (magnetic ink character recognition) is a technology used to verify that certain documents are valid, and in the case of POS systems, specifically that checks are valid – meaning not forged. Special ink, which is sensitive to magnetic fields, is used in the printing of certain characters on the original documents. Information can be encoded in the magnetic characters, which are the special numbers and symbols you typically see at the bottom of checks. These numbers also represent the bank account and the funds available for the customer presenting the check, much like the magnetic stripe on the back of a credit card tells a magnetic strip reader (MSR) about the customer’s credit card account.

Establishments that accept checks as a form of payment can use check readers to verify the payment being received. These days, most people use debit cards instead of paper checks if they wish to pay directly from their account. Since MSR devices also process debit cards, this eliminates one additional potential hardware device that an establishment needs.