Hi everyone,
Our company is trying to start using remote capture and I've been charged with procuring scanners.  There seems to be a huge variation in the market and I'm wondering why I would need a few features that come on some of the more expensive machines.  Can someone tell me the importance of these things...

MICR reading
Endorsement (and what the heck is it!)
Franker (again... what IS this??)

I've read in some places that MICR is really important to the banks, but if that's true why are there so many scanners that don't use it?

Thanks for the help.

Hi Regina,

The MICR is the line on the bottom of the check. printed using special characters (MICR characters) It is printed with magnetic ink and the scanner has to be equipped with a magnetic ink reader to interpret it. The endorser on a scanner is usually an audit trail that can be printed (using an ink jet printer) on the back of the check to show user defined information (e.g. date scanned etc.). This is not to be confused with the "endorsement" on the back of the check for clearing purposes. Finally, franking is usually the marking of the check (on the front or back) with a stamp to minimize confusion on checks that have already been scanned (e.g. Processed by RDC).

Hope this helps

Ed

Thanks for explaining Ed.  I've noticed that a lot of scanners offer some of the features we're talking about but not all.  What's the difference?  It seems like there's a huge variety of prices out there and I don't want to over buy for what my company needs.  At the same time I don't want to end up with junk that doesn't really get the job done correctly. 

I wish I could offer you more consoling words than the following.

It is most likely that the equipment available (and its pricing) will be determined more by your bank/RDC provider than the particular model or where it is obtained from.  Currently, certain software supports only certain scanners.  All other factors being equal, some of the software out there is really awful, awkward, feature impoverished, and painfully slow to use.  To the degree to which choices are available to you, I would insist on trial usage before signing up for anything.  And if several options were in fact available to me (which might not be the case if your company is small in a small town) I would insist on a full-scale operational demonstration of all.

You will need to examine service availability and service pricing issues very carefully.  Costs are all over the map.  Quite frankly, some banks are raping and pillaging and, examined carefully, this may be cause for a new banking relationship.  You should also read the contract that comes with RDC very carefully.  Many banks are hoping the fine print is not read and understood and more than one contract is written that shifts liability to the depositor that should reside with the bank.  A bank that has done a good job with RDC will have lowered its operating costs for servicing your companies deposits.  One would thus expect that fees for RDC usage should be the same or lower. 

A scanner and scanner pricing might be reason for you to consider alternative suppliers because some providers are bundling the scanner with services (generally higher priced) some are selling scanners (or referring the user to a particular provider) where a particular model may be priced significantly higher than street price.  In scanners I wish I could tell you you get what you pay for.  Unfortunately I can not.  I think some of the scanners are rather poor, some design-wise and some quality wise.  But with delivery channels and service terms all over the map for the same unit, what in my mind might be the worst unit may well be the most expensive.  Just as I would recommend a test of the software your provider will obligate you to use, I would consider that a test of the particular scanner/software combination, further in tandem with an evaluation of service pricing and contract terms.  Poor software can make a good scanner look bad.  A particularly important factor is to consider how the scanner is going to be serviced with what sort of availability guarantees at what cost and by whom. 

Part of the reason that scanner selection is a troubling problem is that more than one RDC provider has been disinterested in the issue of scanner performance and quality because they charge more for items that fail to scan well.  Here, for example, you might look at item repair costs (for a scanner that reads MICR poorly) in your services agreement.  And, to you, an image quality failure might be delayed or lost funds, a challenged customer relationship, and a big return item charge.  To the RDC provider it is more revenue from highly profitable return item fees. 

Notice that so far we have discussed nothing regarding your needs and how that might influence your choice of provider,  software, and scanner.  Do you have a lot of checks or just a few?  If you are scanning two checks a day you can probably live with a pretty awkward system and software.  Do you want to record your payments at the same time as putting together your deposit?  Would you like to image advice documentation at the same time you scan the check and have a unitized image record system?  Some provider/software/scanner choices entirely close out the possibility of a deposit system integrated with your normal accounting processes.  Do your checks come from well known, highly established, customers?  Or are they from walk-in in consumers (including scam artists and bad check writers)?  If the latter, I would be particularly concerned about fraud detection and prevention tools the provider may or may not make available.

My bottom line is that (within reason) you should pay whatever you have to pay for the scanner that comes with a service that efficiently and cost effectively meets your business needs - whatever those might be.  And here is but one of the several tests that should be applied to your RDC service provider candidate.  Ask simply what scanners (by make and model) have been interfaced and tested on their system using their software and what are the comparative strengths and weaknesses of each?  If your RDC provider can not name at least four different scanner models from at least three different manufacturers and clearly tell you which is best and which is worst along each of several different dimensions, ideally showing you test data and allowing to see a demo of a model that perhaps they will not allow you to use, then you will probably find another service provider better prepared to serve your needs. 

It is OK in my book for a provider to offer only one scanner choice if that choice is based on careful comparative testing and backed up with results showing the choice is superior.  Indeed, I would consider this better than a provider that lets you pick from a number of models, but is unwilling to recommend a specific best choice for your business and tell you why that is their recommendation.