What technology does a check reader primarily utilize to process transactions?

A check reader primarily utilizes Magnetic Ink Character Recognition (MICR) technology to process transactions. MICR is specifically designed for reading characters printed in a special magnetic ink at the bottom of checks. This ink contains metal particles that are magnetizable, allowing the MICR reader to detect and interpret the encoded information, such as the bank's routing number, the account number, and the check number, swiftly and accurately.

This technology ensures secure and efficient check processing, making it an essential component in the banking and payments industry. Unlike Optical Character Recognition (OCR), which is used primarily for reading printed text but is not as effective for small dimensions or specific fonts used in check processing, MICR is tailored for this specific purpose and allows for high-speed processing in bulk.

Radio Frequency Identification (RFID) and barcode scanning technology are utilized for different applications, such as inventory management and tracking goods, rather than for processing checks. Thus, MICR remains the core technology for check readers to ensure accuracy and security in financial transactions.