Card companies are fending off criminals and the effects of new laws

It’s not every day the payments industry is compared to the drug trade. But apparently it offers equal opportunity for motivated criminals.

"A Secret Service agent told us that organized crime is spending as much time on payments as on drugs,” Thomas Swidarski, the president and chief executive of Diebold Inc., told audience members during a keynote address Monday.  "Cyber threats are real ... and attacking payments."

In an interview Tuesday, Chuck Somers, Diebold's vice president of ATM security and global professional services, said criminals are so interested in payments largely because it’s a "low-impact" field: jail time and violence are relatively low, especially compared to the slightly less cushy drug trade.

Swidarski, who spent much of his talk discussing Diebold's security services and its ATM innovations at banks outside the U.S., said that some of those banks are bringing biometric technology to consumers as a way to verify identities at the ATM.

"We see thumbprints, fingerprints," and even a palm-print scanner deployed at the ATMs of a Brazilian bank, he said. “In the U.S., biometrics are still mostly employee-facing” but in countries like Brazil, banks that adopt such technology win some public recognition for "thought-leadership" and "being innovative in the community."

Down the hall, at SourceMedia Inc.’s annual Collections & Credit Risk conference, which also concluded Tuesday, the tone at a session about credit card collections was rather grim.

"I think they’re all depressed," quipped Michael Burkhalter, a vice president at Wells Fargo’s card services unit, when no audience members had questions at the end of the session.

Like other parts of the card industry, collections and especially risk executives are dealing with the impact of the credit card law. 

Burkhalter said during the panel discussion that the card risk group at Wells was having an especially difficult time with the law’s restrictions on issuing to consumers under the age of 21. 

The law requires anyone applying for a credit card while under the age of 21 to have either a legal adult co-sign the application, or to prove they can handle the debt themselves.

"The 'independent ability to pay' requirement especially, with regard to young consumers, is causing our risk group a lot of heartache," Burkhalter said.