The Check Clearing for the 21st Century Act is a United States federal law, Pub.L. 108–100, first enacted on October 28, 2003, by the 108th U.S. Congress and set to take effect exactly one year later, in 2004. Known popularly as the Check 21 Act, the law allows for the recipient of a paper check to create a digital version of the original – a process is known as check truncation –to cut down on physical handling and potential misplacing of the paper checks, especially in high quantities, and make more efficient the deposit and clearing process therein without needing a special check printer.
Among other things, this has allowed major banks to offer remote deposit services to their customers. With most national banks, individuals can now use their cell phones to capture images of checks and deposit them electronically without ever needing to visit a branch or a local ATM. Even better, for small businesses and others who may handle thousands of checks every year, this law has also revolutionized check printer services on a grand scale.
Check printer technology and OCR
Today, many American banks use an optical check reader (OCR) to scan, deposit, and account for checks printed on simple blank paper stock. The Check 21 Act has given them the ability to fast-track check processing and vastly simplify check printer services thanks to rapidly advancing technological improvements, specifically with OCR. The technology is so good, in fact, that it allows everyday customers, small business owners, and others to simply print checks at home or in the office, on simple blank stock paper and without any cumbersome or expensive check printer technology — a win for the bank as well as its customers in terms of remarkably improved efficiency.
Check printer developments and MICR
As check printer technology has improved over time, and the law has caught up to present-day business standards, everyday people with home printers can increasingly digitize their own payments, invoices, and bills just like businesses. For example, almost every basic home and office printer now has improved to include the use of Magnetic Ink Character Recognition (MICR) toner with iron oxide, which allows the software to read printed check information quickly. MICR toner can read and print a considerable number of checks at a low cost, allowing small businesses and others to print literally thousands of checks while using less than $50 in toner on their basic printers.
Even better, most banks today have their own fully-updated scanning technology that reflects Check 21 Act standards and goes beyond MICR need. Banks can process checks solely through image OCR, as mentioned above. That’s allowed for far faster processing and deposits with better security – even more than you would see when you deposit a standard check through an ATM. Now, using cloud computing technology, a simple scan of the check or picture snapped on your mobile device makes a deposit happen — no special ink, toner, paper, or other features needed.
Above all, it’s clear that vastly improved technology has summoned a new era of check printer, scanner, and deposit needs for all customers, from large banks to individuals and small businesses. It’s never been easier, simpler, or more straightforward to take control of your company or individual finances and track bills, payments, and invoices.