A compact ribbon cassette for dispensing and storing a ribbon or tape upon integrally formed dispensing and storage spools. The dispensing and storage spools are disposed upon a common rotatable shaft mounted for rotation within the housing. A pair of meshing gears provide a positive ribbon drive that ensures that fresh ribbon is in place at the thermal print head for each MICR encode operation. The meshing gear positive ribbon drive system provides the optimum amount of ribbon for the print cycle to assure that MICR encode characters meet accepted industry quality standards.