Canadian Cheques Get an Overhaul
The Canadian Payments Association (CPA) developed new cheque specifications as part of a larger industry-wide plan to modernize Canada's cheque clearing system through image technology. The new specifications ensure that high-quality images can be captured from the cheques for use by financial institutions and their customers, and to make cheque processing more efficient. Personal cheques need to be compliant by June 30 2007.
To help business customers make a smooth transition, the CPA has introduced a grace period for "old format" business cheques until September 2, 2008. This extended transition or “grace period” will allow businesses that are still working on the changes to use up their existing supply of cheques and to make any required changes to software.
Are your cheques compliant? If you ordered your personal cheques after April 2005 and your business cheques after October 2005, your cheques meet the new standards. Please visit any MSCU branch to order your new personal or business cheques. You can reorder cheques by simply signing and dropping off the reorder form at MSCU branch; these cheques will be fully compliant. The reorder forms are included with your original cheque order. Fees may apply.
FAQs
What changes were made?
Adoption of a numeric date field in one of three specified formats (YYYYMMDD, MMDDYYYY or DDMMYYYY). It is essential that field indicators be printed below the date field to indicate which format is being used. Bilingual date field indicators are accommodated for cheques using the international date format (YYYYMMDD).
A mandatory serial number in the MICR line encoded at the bottom of the cheque (the serial number was previously an optional field in the MICR line).
An increase in the minimum length of cheques to 6.25", or 15.88 cm, from 6", to ensure there is sufficient space for the mandatory serial number in the MICR line.
Specified positions for key fields on the cheque, including the date field and the amount in figures.
Disallowance of elements that may hinder the capture of images or data from the cheque. For example, inverse printing, italics or slanted fonts, a bottom border printed below the MICR line, and the use of black carbon on the reverse of cheques will not be permitted.
A provision to ensure that security features do not interfere with key data, or "areas of interest", as defined in Standard 006, Part A, either prior to imaging or post imaging. In particular, if a VOID pantograph or other hidden pantograph is used, the pantograph must not be visible on images captured from original cheques.
New printing requirements on the reverse of the cheque so that image capture can be verified.
Some revisions to technical specifications (e.g. Print Contrast Signal) to ensure high-quality images can be captured. For example, some complex or colourful backgrounds that have been used on cheques to date may interfere with image quality and may need to be changed.
When do the new specifications come into effect?
The new cheque specifications are in effect now. Businesses that have not yet updated their cheques are strongly encouraged to do so by June 30, 2007 in preparation for the transition to the new clearing process new clearing process. Any new cheque orders printed after that date should reflect the new "image friendly" specifications.
Personal cheques in the new format have been available through MSCU since April 2005. Consumers with a supply of "old format" personal cheques can continue to use them until they need to re-order, provided that a good image can be captured from them. Based on experience to date, the vast majority of personal cheques are already "image friendly".
Can I write cheques on my personal account?
MSCU Combination accounts combine chequing privileges with a tiered interest-bearing account.
On Canadian dollar combination accounts, members can choose to have cancelled cheques returned with their regular statements, for a small fee.
Can I write cheques on my Business account?
Cheque writing privileges are available on both Business Chequing and U.S. Chequing account. With a business account at MSCU, you pay for individual services as you use them. Please refer to the Service Fee Schedule. Minimum monthly access fee $5.00
The U.S. chequing account has all of the features of the U.S. Savings Account plus the convenience of cheques and pre-authorized transactions in U.S. funds. Fees apply for each U.S. cheque or pre-authorized transaction processed. Please refer to the Service Fee Schedule.
QUICK LINKS
Click here for general CPA information
Click here for detailed CPA information regarding the new Standard 006 Specifications for MICR-Encoded Payment Items
Click here for a quick guide to the new CPA Standard 006 Specifications For MICR-Encoded Payment Items
Click here for MICR Specification Sheets
Click here for Proposed Specifications for "Image-Friendly" MICR-encoded Gift Certificates, Store Coupons and Paper Pre-Authorized Debits (PADS)
CHEQUE SAMPLES
Click here to download a pdf of personal and business cheque samples.
About Canadian Payments Association
Canada's clearing and settlement system is among the most efficient in the world, enabling consumers and businesses to make and receive payments throughout the country quickly and reliably. The vast majority of payments involve moving funds between accounts at different financial institutions. The Canadian Payments Association (CPA) operates national clearing and settlement systems that facilitate this flow of funds between institutions and mitigate risk to payment system participants. On average, some 20.6 million payment items, representing $164 billion in transactions, were cleared and settled through the CPA‚s systems each business day during 2005. These include cheques, wire transfers, direct deposits, pre-authorized debits, bill payments and point-of-sale debits. Note that transactions charged to credit cards are not cleared through CPA systems, and thus CPA Rules do not apply to them. For more information please visit www.cdnpay.ca.
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