BOGOTA, Colombia -- Forget bulk cash. Heavy and hard to hide, it's simply not the most convenient cross-border conveyance for a 21st-century money launderer.

A safer and increasingly attractive alternative for today's criminal is electronic cash loaded on what are called stored-value or prepaid cards. Getting them doesn't require a bank account, and many types can be used anonymously.

U.S. crimefighters consider the cards a burgeoning threat that regulators haven't adequately addressed.

In the past year, said John Tobon, a senior U.S. Immigration and Customs Enforcement agent, the cards have become the preferred means of paying couriers who transport illicit drugs across the U.S.

No one knows how big a role the cards play in moving the more than $20 billion in drug earnings that U.S. authorities estimate cross from the U.S. to Mexico annually. Yet while anyone crossing that border with $10,000 or more in cash must declare it, prepaid cards are legally exempt.

"Law enforcement loses lives all over the world trying to keep (major criminals) unbanked, and these prepaid cards are offering them a great alternative to sneak into our financial system," said Tobon.

It was bank and wire-transfer records that enabled law enforcement to identify the 9/11 hijackers and their overseas cells. "Had the 9/11 terrorists used prepaid cards to cover their expenses, none of these financial footprints would have been available," a U.S. Treasury Department report observed.

Cash substitute

Visually, the cards are barely distinguishable from credit or debit cards, and the most versatile let users reload them remotely without having to reveal their identity, using cash, moneygrams, PayPal and other online payment services.

Some cards can process tens of thousands of dollars a month. Just load them up in Connecticut or Texas with, say, the proceeds of cocaine sales and collect the cash in local currency from an ATM in Medellin, Colombia or elsewhere in Latin America.

"I'm not so sure we have a sophisticated understanding of how to deal with this," said Richard Stana, who oversaw a report on prepaid access for the General Accounting Office, the U.S. Congress' research arm. "It's just a whole new way of doing business."

State and local police in the U.S. are only just waking up to the cards, so ICE created an explanatory pamphlet it is distributing far beyond Customs and Border Patrol agents.

Paul Campo, chief of the DEA's financial crimes unit. It is in the U.S. southwest, said the DEA has active cases in the Southwest, New England and the state of Georgia.

While offering more options to money launderers, prepaid cards also are changing the way ordinary law-abiding citizens and businesses and even governments handle money. Wal-Mart uses them to distribute payrolls, and U.S. government agencies to deliver benefits such as food assistance. Migrant workers use them to send money home.

In the U.S. alone, an estimated $107 billion moved on branded prepaid cards last year, according to Aite Group, a financial research firm. Globally, the Boston Consulting Group forecasts, transactions with reloadable prepaid cards will reach $840 billion a year by 2017.

Versatile

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The cards offer flexibility, privacy and a shield against ID theft. Cheaper varieties are sold at pharmacies, mall kiosks and check-cashing storefronts.

An October report by the 34-nation FATF, the Financial Action Task Force that sets global anti-money laundering standards, cited a half dozen laundering cases involving prepaid cards in its short history, each involving from $200,000 to $5 million and most in the U.S.

Yet Tobon said they have in the past year or so become the preferred method for paying smugglers to move drugs across the U.S.

"Their payment is being given to them on these cards," said Tobon, who runs ICE's illicit finance and crime proceeds department.

In Colombia, the financial investigations agency chief said he fears drug traffickers are repatriating huge sums from Europe and Asia with high-limit prepaid cards obtained there.

"You enter (Colombia) carrying five cards in your pocket and that's a quarter million dollars," said Luis Suarez. "And of course they can be reloaded remotely."

There are technical differences between stored-value and prepaid cards: The former have a chip that contains the sum they hold, the latter use a magnetic stripe for verification and store the sum on a central computer.

But more important is the cards' versatility.

The most flexible are those, typically branded by Mastercard or VISA, that can be used on ATM networks, online and in stores.