- MRZ contains your name, date of birth, nationality, document number, document type, issuing country, expiration date, and gender. It’s the same information visible elsewhere on the document.
- Advanced MRZ scanners can handle poor document quality, faded text, and damaged corners using sophisticated OCR technology. However, severely damaged documents may still require manual verification or document replacement.
- MRZ scanning delivers near-zero error rates with built-in validation, while manual data entry has 1-3% error rates.
Ever wondered about those weird lines of text at the bottom of passports that look like someone’s cat walked across a keyboard?
If you’re running a business that needs to verify identities, whether you’re in banking, gambling, hospitality, or any regulated industry, those “random” characters could be your secret weapon for faster, more accurate customer verification.
Those cryptic codes are called Machine Readable Zones (MRZ), and they’re designed to make document verification faster and infinitely less painful than manual data entry.
So, whether you’re exploring MRZ for the first time or looking to optimize your current verification systems, this guide is for you!
I am going to cover all the essential aspects you must know as the one looking after compliance.
What Is MRZ Code and How Does It Work?
Machine Readable Zones are those cryptic lines at the bottom of your passport that contain all your document details in a format computers can read instantly.
MRZ encodes your name, birth date, nationality, document number, and expiration date using letters, numbers, and “<” symbols as separators. The format follows international standards, so any MRZ scanner worldwide can read any country’s documents.
How Can MRZ Verification Help With Compliance – Benefits
When businesses implement MRZ technology, they see immediate improvements across four critical areas that directly impact their bottom line.
-
Processing Speed
MRZ scanning takes under half a second compared to 2-3 minutes for manual data entry. FIs that previously spent five minutes per client verification during onboarding can now complete the process in thirty seconds. This operational efficiency frees up staff for revenue-generating activities.
-
Data Accuracy
Manual data entry creates errors in roughly 1-3% of transactions, while MRZ scanning delivers near-zero error rates thanks to built-in validation checksums. Banks know that one wrong digit in a passport number triggers compliance violations, failed background checks, or transaction delays. Each manual correction costs $25-50 in processing time.
-
Document Authenticity
MRZ scanning includes sophisticated checksum validation that detects document tampering or forgery attempts. The technology cross-references data between the machine-readable zone and visual inspection areas, flagging inconsistencies that human reviewers might miss.
-
Customer Experience
On average, corporate banking clients endure 100-day onboarding processes. Guess what? Over 40% of that time is wasted on KYC paperwork. MRZ cuts document processing, which means fewer frustrated customers abandoning applications halfway through. Faster onboarding directly translates to higher conversion rates.
-
Regulatory Risk Mitigation
FinCEN hit USAA Federal Savings Bank with a $140M fine in 2022 for weak AML programs. Automated MRZ verification creates accurate data collection and audit trails that keep regulators satisfied and businesses out of penalty territory.
Now, let’s see how MRZ verification compares to manual verification.
MRZ Scanning vs Manual Verification
The true cost of manual verification extends far beyond the obvious labor expenses, creating hidden inefficiencies that compound over time.
| Factor | Manual Verification | MRZ Scanning |
| Process | Staff manually reads the document, types each field (name, DOB, passport number, etc.) into the system, and double-checks for accuracy. | The employee places the document under the scanner or uses the mobile camera, and data populates automatically in under 30 seconds. |
| Error Rate | Typing mistakes occur in 1-3% of entries due to similar-looking characters, rushed data entry, or illegible handwriting | Built-in checksums validate data integrity automatically, flagging any inconsistencies immediately. |
| Staff Requirements | Requires trained personnel who can recognize document formats, read multiple languages, and identify security features | Any employee can operate a scanner with minimal training in the software interface. |
| Peak Volume Handling | Must hire temporary staff or pay overtime during busy periods, leading to inconsistent service quality | The same scanning equipment handles volume surges without additional human resources. |
| Compliance Documentation | Staff manually create audit trails, often missing timestamps or data points required for regulatory reviews. | The system automatically generates complete digital records with timestamps, document images, and validation results. |
| Document Quality Issues | Employees struggle to read faded text, damaged corners, or worn security features on older documents. | Advanced OCR technology compensates for poor lighting, document wear, and image quality issues. |
| Document Damage Issues | Staff struggle with worn/damaged IDs | Advanced OCR handles poor-quality documents |
| Multi-language Support | Staff need language skills | The universal format works across all countries |
Getting Started With MRZ Verification – Implementation Requirements
Understanding what you actually need to deploy MRZ technology helps you budget realistically and avoid expensive surprises during implementation.
- Hardware: MRZ scanning works on standard mobile devices, eliminating the need for expensive specialized equipment. Businesses can choose between smartphone cameras (virtually no additional cost), dedicated document scanners ($200-2,000), or integrated kiosk systems ($5,000-15,000) depending on volume and security requirements. Most companies start with mobile solutions to test effectiveness before scaling up.
- Software: MRZ technology integrates through APIs like Signzy or software development kits (SDKs) that connect to existing business systems.
When it comes to implementation, you can complete basic MRZ integration within 30-60 days. This includes system testing, staff training, and workflow adjustments.
However, complex enterprises with multiple locations or legacy systems may need 3-6 months for full deployment. Here, things depend on existing infrastructure compatibility.
Automate MRZ Verification
MRZ technology represents just the beginning of what’s possible when you implement comprehensive digital identity verification.
While understanding MRZ codes helps you appreciate the foundation of automated document processing, real business transformation happens when you integrate these capabilities into a complete verification ecosystem.
If you are ready to move beyond manual verification, Signzy’s comprehensive KYC suite combines advanced MRZ scanning with biometric verification, document authentication, and regulatory compliance tools.
Signzy offers:
- Real-time document authentication with advanced security feature detection
- Biometric matching that links document photos to live selfies
- Automated compliance reporting for AML, KYC, and regulatory requirements
- API-first architecture that integrates with your existing systems in days, not months
- Global coverage supporting international expansion without verification roadblocks
Book a personalized demo to see how businesses like yours are reducing verification time while improving compliance accuracy.
FAQs
Is MRZ scanning secure and GDPR compliant?
Many MRZ systems process data locally on a device without an internet connection, keeping sensitive information secure. Cloud-based solutions use encrypted transmission and can be configured for GDPR compliance.
Can MRZ scanners read documents from all countries?
MRZ follows international ICAO standards, so scanners can read documents from virtually any country. However, some older or non-standard formats may require specialized parsers.
How long does MRZ scanning take compared to typing information manually?
MRZ scanning takes under half a second compared to 2-3 minutes for manual data entry. This represents roughly 80% time savings in document processing workflows.
What happens if the MRZ scan fails or can't read the document?
Most MRZ systems provide fallback options, including manual data entry, document re-scanning with different lighting, or guidance for users to position documents correctly. Staff can always verify information manually if needed.
Do I need special training to use MRZ scanning technology?
MRZ scanners work on standard mobile devices and require minimal training. Most employees learn the basic scanning process in under 30 minutes, compared to the extensive training needed for manual document verification.
