Bank checks have changed hands throughout generations, periods, and even centuries. As discussed in Annex A of ASC X9 TR 2-2019, during the California Gold Rush, to lessen the need for stage coach lines to ship gold and silver, checks were used for payment clearings. Long before the days of the frontier, Goldsmiths in 1600s England stored gold and silver in exchange for Goldsmiths notes. Regardless of the year or surroundings of these pieces of paper, understanding, designing, and producing checks with proper data elements has been crucial for exchanging funds.
Unfortunately, many concerns associated with checks have also persisted. Near the end of the Gold Rush, many banks failed when depositors made a run. Clearing and collecting centers ultimately became a solution to assure that checks would move quickly enough and effectively. By 1913, the Federal Reserve Act set 12 Federal Reserve Bank Districts and their branches as check clearing and collecting centers.
However, the volume of checks exchanged in the modern world is massive. By 1952, there were 8 billion checks written annually. According to the Federal Reserve, this number swelled to around 19 billion in the early 1990s, but it has since dwindled down to around 4.7 billion.
Nonetheless, these paper-based negotiable documents remain a key means of transferring sums. Therefore, it is critical that check design incorporates the appropriate dimensions, paper characteristics, data requirements, optional design elements, security features, and specifications. For expedient and error-free processing, these factors have been standardized, and automation, and, in recent history, digitization has accelerated the financial industry.
A technical report, ASC X9 TR 2-2019: Understanding, Designing, And Producing Checks provides a summary of information found within standards documents, as well as regulations, to give guidelines for the design and production of a check, focusing on the proper location of a check’s data elements. This document, comprehensive and informative, expands upon the rationale for the location of these data elements.
As such, ASC X9 TR 2-2019 covers, in detail, the design of a check, the lifecycle of a check (including the processes for deposit, in-clearing, and incoming returns), best practices for writing checks, check processing techniques, and machine populated check information.
Much of this information is relatively visible to the casual observer, i.e. anyone writing or receiving a check. Even MICR (standing for magnetic ink character recognition) technology, which is populated by a row of numbers and characters, was created with consideration for both machines and a user’s eyes. However, there is more to the common check that meets the eye. For example, art and graphic treatments chosen for check designs are highly specialized. As discussed in ASC X9 TR 2-2019, these images are typically subject to significant adjustments by the graphic artist to meet industry standards and prevent processing problems.
In addition to all the details addressed for checks, the discussion present in ASC X9 TR 2-2019 parallels that of deposit tickets, which are frequently printed and distributed with pre-printed checks. Most deposit ticket designs are addressed in Annex D of the technical report.
This technical report is intended to be used by designers and printers of checks, as well as developers and users of check digitization and printing software or equipment. However, ASC X9 TR 2-2019 can also act as a source book for educators and publishers help teach students the proper writing and use of checks and deposit tickets.
Please note that numerous standards specify or address the format and exchange of checks, notably those developed by Accredited Standards Committee X9 (ASC X9), who was also responsible for the publication of this technical report. You can feel free to peruse our blog for further information on X9 standards.
ASC X9 TR 2-2019: Understanding, Designing, And Producing Checks is available on the ANSI Webstore.