How Do Cheque Scanners Work? (Updated 2020)

    May 19 2020

    Topics: Cheque Scanner, Canada

    Modern digital scanning technology has changed the way businesses and financial institutions process cheques. Cheque scanners speed up what has traditionally been a labour-intensive process, increasing efficiency and reducing costs.

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    Wondering if a cheque scanner could help your business? An inside look at how they work should shed some light on the subject.

    Digital Scanning

    The first step 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 positioned in a line. These lights sweep over the cheque’s surface under a bright light. The detectors use the variations in light and dark to create the digital image, translating the “light” and “dark” into data. The scanner gathers the data on the paper cheque and then produces a replica image file.

    Handwriting Recognition

    The most impressive part of cheque imaging is the handwriting recognition technology embedded in most devices. This is also the trickiest part of the process. After all, even humans sometimes have trouble discerning what handwriting says. 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.

    To accomplish this difficult task, 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. This occurs only when the handwriting is unclear and human verification is needed.

    MICR Conversion

    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 (MICR) font, which is 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 procedure because the printing is done in a standardized font. The result is that modern cheque scanners have an incredibly high accuracy rate.


    Once the cheque image is converted to data, the information is checked for reasonable values. This might include checking the routing number’s format 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 process safeguards against errors.

    Remote Deposit

    Once your payments are converted to images and validated, you may then remotely deposit this legal digital cheque to your financial institution, provided they offer this service.

    Remote depositing is a convenient way to deposit cheques without having to physically go to the bank. In the current pandemic environment, this could help your team stay safe.

    Banks can also process these deposits faster, 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.

    Database System

    Using a cheque scanner for your business also allows you to create a simple-to-use and manageable database system for customers who pay by cheque. All scanned cheques can be stored so you may organize them and easily access the information at any time. The information may be saved in a file that could also be sent to various applications, the web, or email.

    If you process cheques regularly, then investing in a cheque scanner can help you cut the costs, streamline operations, and gain access to your funds sooner. 

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    Andrea Lombardi

    Andrea Lombardi

    Andrea joined the CashTech team upon its inception in 2003. Learning the business from the ground up, she now utilizes her expertise in account management, planning, and negotiation while managing the daily operations of CashTech’s sales, marketing, and logistics departments. Andrea holds a bachelor’s degree from the University of Western Ontario. She enjoys travelling and has a passion for personal fitness, including obtaining her kettlebell certification. Andrea lives in Toronto with her husband and two young sons.

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