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Driver's License ID Beats MICR, Hands Down

If you have spent any time in the Payment Services Industry, you know that one of the many new Point-of-Sale products in the last few years is the MICR reader. SCAN is probably responsible for moving the trend along more than any other organization, and this is due to the fact that they have aggressively acquired "Closed Account" information from banks since the very beginning. It should be obvious why MICR has become an important ID number for SCAN. Unless the MICR number is used in the "Approval" process, the "Closed Account" information that they work so hard to acquire from banks becomes relatively worthless.

While SCAN has pushed MICR since their inception as a business, they are not alone. TeleCheck was one of the first Check Guarantee companies to use the consumers account number (MICR) as ID (they also acquired closed account information from banks), since they were already accepting a multitude of alternative IDs. In addition, Primary Payment Systems, Inc., has announced that it will be selling closed account MICR information to Equifax Check Service, TeleCheck, and National

Magnetic
License States

1. Arizona, July 1995
2. Arkansas, October 1994
3. California, March 1991
4. Colorado, February 1994
5. Florida, March 1993
6. Iowa, October 1993
7. Kansas, June 1994
8. Louisiana, May 1995
9. Maryland, January 1994
10. Minnesota, February 1995
11. Missouri, Unknown
12. Montana, March 1994
13. New Hampshire, March 1995
14. New York, November 1992
15. Ohio, May 1995
16. Pennsylvania, December 1994
17. South Carolina, January 1994
18. Texas, July 1993
19. Vermont, January 1994

City Check. This will permit each of these organizations to increase declines due to this closed account information.

Over the last few years, virtually all Check Guarantee companies including CrossCheck, have been forced to accept MICR ID in at least a limited way since many merchants have purchased MICR readers. (CrossCheck uses an "MR" state code to designate a MICR ID).

For any Check Approval system to function properly, there must be an ID number used as the key to the system that is reliable enough to not be easily counterfeited, and which can reliably identify a consumer as negative in the system on the next shopping occasion.

The driver's license was adopted by the Check Guarantee Industry because it is more difficult to counterfeit than other IDs; it had a photo, and the number can be authenticated from the state of issuance. The problem with the driver's license, however, is that it must be entered into the terminal or read to the Check Approval company by phone, and running the check through a MICR reader seems, well... simply more "High Tech."

Well, this is changing, and it's changing rapidly. Currently 19 states are in some stage of adopting digital imagining technology stored on a magnetic strip on a driver's license.

CrossCheck has supported the use of magnetic stripped driver's licenses in California, since the state's adoption in March 1991. Point of sale terminals can accept the licenses as easily as they do Visa and MasterCard swipes. This approach is as "High Tech" as MICR readers, is a bullet proof ID, and requires no additional equipment.

If you do not have a programming string for the terminals you are supporting, or need some information on how far along your state is in the mag-strip process, contact CrossCheck Sales Support at (800) 654-2365, or The Green Sheet at (800) 757-4441.

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