Electronic Recording Machine, Accounting

ERMA (Electronic Recording Machine, Accounting) was a computer technology that automated bank bookkeeping and check processing.

Developed at the nonprofit research institution SRI International under contract from Bank of America, the project began in 1950 and was publicly revealed in September 1955.

[1][2] Payments experts contend that ERMA "established the foundation for computerized banking, magnetic ink character recognition (MICR), and credit-card processing".

With that problem out of the way, SRI returned a report in September 1950 that stated a computer-based system was certainly feasible, which they called the Electronic Recording Machine (ERM).

Beise demanded a system that would not require the information to be changed from one medium to another, from check to punched card for instance, while simultaneously lowering error rates.

They also experimented with barcode information, and while this worked well even when printed over, if there was enough "damage" to the code a human operator could not read them in order to input them manually.

Instead, they decided to combine the two technologies, and used MICR-printed account numbers which could be read by a magnetic reader similar to those in a cassette tape recorder.

The final ERM computer contained more than a million feet (304,800 metres) of wiring, 8,000 vacuum tubes, 34,000 diodes, 5 input consoles with MICR readers, 2 magnetic memory drums, the check sorter, a high-speed printer, a power control panel, a maintenance board, 24 racks holding 1,500 electrical packages and 500 relay packages, and 12 magnetic tape drives for 2,400-foot (731-metre) tape reels.

By this point, no fewer than 24 companies had expressed interest in building the production machines, and General Electric won the competition.

[citation needed] Payments experts contend that ERMA "established the foundation for computerized banking, magnetic ink character recognition (MICR), and credit-card processing".