What is an EPC (External Processing Code) in Banking?

In banking, an EPC stands for External Processing Code, a specialized numeric digit found on the Magnetic Ink Character Recognition (MICR) line of checks. Its primary purpose is to convey crucial information to financial institutions and other processors, dictating the correct handling or routing of a check or its associated data.

The EPC plays a vital role in ensuring the efficient and accurate processing of checks, particularly for specific types such as Remotely Created Checks (RCCs). It acts as a flag, indicating special handling instructions that might differ from standard check processing protocols.

Key Aspects of the External Processing Code (EPC)

The EPC is an integral part of the MICR line, which is a sequence of numbers and symbols printed with magnetic ink at the bottom of a check. This unique coding allows for automated processing by banking equipment.

Here are the key details regarding the EPC:

• Function: Conveys special information for the correct handling or routing of a check or check data.
• Type: It is a specific MICR digit.
• Location: Found as MICR field 6.
• Position: Occupies position 44 on the MICR line.
• Placement: Located immediately to the left of the routing number.

Importance in Check Processing

The integration of the EPC into the MICR line streamlines the automated processing of checks, reducing manual intervention and potential errors. By signaling special processing requirements upfront, the EPC helps financial institutions manage various check types more effectively, ensuring compliance and operational efficiency. For instance, Remotely Created Checks, which are authorized by the accountholder but not physically signed by them, often utilize the EPC to signal their unique nature, prompting specific verification or handling procedures.

EPC Key Facts