Modern digital scanning technology is relatively new in Canada, but it’s revolutionizing the way businesses and financial institutions process cheques. Cheque scanners speed up the traditionally labour-intensive process, increasing efficiency and reducing costs.
Here’s how they work.
The first step that takes place is a digital scan. The cheque scanning device scans both the front and the back of the payment, transforming the paper cheque into a legal digital image. The scanner is made up of a set of small light detectors in a line that sweep over the cheques surface under a bright light. The detectors use the variations in light and dark to create the digital information. The scanner gathers the data on the paper cheque and then produces a replica image file.
The trickiest and most impressive part of cheque imaging technology is the handwriting recognition it possesses. With so many variations in handwriting, the computer software must be able to recognize all sorts of different styles in order to accurately create the digital image. The software analyzes the image, locates the name, signature, and amount, and converts them. The effectiveness of this handwriting recognition is particularly valuable because it eliminates the need for manual data entry, except in cases where the operator is prompted to type in the correct amount manually if the handwriting is unclear.
At the bottom of a cheque is a routing number, an account code, and a cheque number. This data is printed in a magnetic ink character recognition font, which can be easily read by machines. This ink has additional magnetic resonance characteristics, which allow it to be absorbed and emit a magnetic signal. As the magnetic ink passes over a magnet in the scan path, the magnet charges the ink. Each character creates a unique waveform that can be read and translated. Cheque scanners convert these MICR numbers into the account information required for processing. MICR processing is a simple and straightforward process because the printing is done in a standardized font, allowing modern cheque scanners to have a 99.9% accuracy rate.
Once cheque scanners convert the cheque image into data, the information is checked for reasonable values. For example, the routing number’s format is checked to ensure that the numerical values follow the standard pattern. If any of the data is invalid, the scanner rejects the cheque and the clerk must enter the information by hand. This is done to ensure that errors aren’t included in digital cheques.
Once your payments are converted to images and validated, you can then remotely deposit this legal digital cheque to your financial institution, if it has the right technology to offer this service. You simply send the digital cheque to your bank via an Internet connection, and with just a few clicks, the cheque is deposited.
Remote depositing is a convenient way to deposit cheques without having to find time to go to the bank. It also reduces the time required for your bank to process the payments, so you get access to your funds sooner. The information is encrypted; therefore, it is safe to send your financial information via your online banking system.
When you use a cheque scanner in business, you can not only deposit your cheques remotely and speed up processing, but you can also create a simple-to-use and manageable database system for all of your customers who pay by cheque. All of the scanned cheques can be stored so you can organize them and easily access the information at any time. The information can be saved in a file that can also be sent to various applications, the web, or email.