Check Reading Improves

Tania Hershman

Despite the hype about electronic commerce, Americans write over 60 billion checks a year, and Europe's biggest check users, the French, annually tear out 6 billion. In most regions of the world, usage of paper payment documents such as cheques and giros is still growing steadily.

Check processing has been traditionally performed by humans . But new technology is now increasingly replacing manual sorting. Human checkers, who read an average of 1000 checks per hour with an error rate of 1 to 2 percent, are facing stiff competition from intelligent pattern-recognition units, which read around 30,000 checks an hour with the same error rate. This technology is known as courtesy amount recognition (CAR), named after the check's num eric, or courtesy, amount.

Since their first commercial deployment in banks two years ago, CAR systems have increased recognition rates to up to 50 percent today. CAR systems ready for deployment later this year will achieve even higher recognition rates.

The primary challenge of CAR is to distinguish the check's background from the often rapidly written, smudged courtesy amount. In the first generation of products, the system turned a scanned gray-scale image into a binary black-and-white image, saving on processing power and memory requirements. The latest CAR software processes more informative gray-scale images, or just a gray-scale snippet of the courtesy amount, thus increasing read rates to around 60 to 65 percent.

In general, banks have been slow to adopt any CAR systems, let alone the new gray-scale systems with images eight times heavier than their binary (black-and-white) counterparts. "Only 5 to 10 percent of banks in the U.S., the biggest market, use some type of nonh uman check-processing system," says Or Sari of Orbograph (Yavne, Israel), developer of the OrboCAR system. "But I believe that in 1998 we will see gray-scale check scanning getting to the market."

One of the first gray-scale systems in Europe was installed by Unisys Payment Systems (St. Paul de Vence, France) at the U.K.'s Midland Bank late last year. Unisys's InfoImage Item Processing System incorporates gray-scale CAR developed together with CGK (Constance, Germany), but the read rates of this system still hover around 50 percent.

Another approach to improve performance of CAR systems is to cross-validate the courtesy amount with the amount written in words, the legal amount. "This provides for a substantial increase in read rates," says Roger Raihala of Parascript, a CAR system developer from Moscow that now has its international headquarters in the U.S.

A more radical option is to get rid of checks. Several European countries, including Germany, Belgium, and the Netherlands, have completely re placed checks with giros, which have more information fields about payee and recipient and are designed with image recognition in mind. "People in Germany do not use checks any more," says Gunter Hensges of Parsytec (Aachen, Germany), developers of the ParsyForm giro-reading software. "Giros are designed in colors that are machine-readable, and so we can achieve read rates of at least 80 percent."

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Where to Find

CGK

Constance, Germany
Phone:    +49 7531 870
Fax:      +49 7531 874 567
E-mail:   
sales@cgk.de

Internet: 
http://www.cgk.de



Orbograph

Yavne, Israel
Phone:    +972 8 942 3769
Fax:      +972 8 942 3800
E-mail:   
info@orbograph.com

Internet: 
http://www.orbograph.com



Parascript

Boulder, Colorado, U.S.
E-mail:   
roger@parascript.com

Internet: 
http://www.parascript.com



Parsytec

Aachen, Germany
Phone:    +49 241 96960
Fax:      +49 241 9696 500
E-mail:   
support@parsytec.de

Internet: 
http://www.parsytec.de



Unisys Payment Systems

St. Paul de Vence, France

Phone:    +33 493 323000
Fax:      +33 493 327018
E-mail:   
rein.geerdes@unisys.com

Internet: 
http://www.unisys.com

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Automation Still Needs Help Checking Checks

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Check-recognition rates are improving, but systems can't replace humans yet.