Microchip implants could be considered the ultimate form of mobile payment — skipping the smartphone altogether in favor of giving people bionic abilities. And a small segment of the population is already lining up to try it out.

Proponents of the chips argue that implants could drive the future of payments and other smart functions, and that they create conveniences for those who are willing to embrace the technology. But critics question the ethical ramifications of offering chips in the workplace, and they raise questions about whether today’s chips provide enough of a compelling use case to justify their physical invasiveness.

Last April, Epicenter, a digital startup hub in Stockholm, made headlines after the company started making microchip implants available to its employees. A few months later, a Wisconsin firm, Three Square Market, followed suit, holding a highly publicized chip party on Aug. 1 where more than 50 of the company’s 85 employees volunteered to let a body piercer implant them with chips. The company even picked up the cost of the $300 chips. Both Epicenter and Three Square Market use chips created by Swedish tech firm BioHax International.

RFID implant in human hand
An X-Ray of a human hand with an RFID microchip implanted between the thumb and forefinger. Getty Images

The RFID chips are the size of a grain of rice and are implanted in fleshy part of the skin between the thumb and forefinger. The chips use near-field communication (NFC) technology, which is also used in contactless credit cards and mobile payments. It’s also the same technology used to track pets and packages.

From pets to people
If the BioHax technology takes off, it would fulfill a longtime desire of the payments industry to shift habits from “don’t leave home without it” to “you can’t leave home without it.”

Fifteen years ago, Mastercard experimented with similar tech from Palm Beach, Fla.-based Applied Digital Solutions Inc., with plans to bring implantable payment chips to banks.

The technology dates to 1987, when it was developed for identifying pets and livestock. After the 9/11 attacks, the chips were modified for human use with the goal of identifying victims and rescue workers, ADS told American Banker in 2003. At the time, the company envisioned its technology would be viable for payments in three to five years.

Even then, there were concerns about privacy and whether scammers could skim payment card details; the cost and invasive nature of the implant makes it much more difficult to replace if the chip’s payment account is stolen.

Today, the use cases around implantable chips are less concerned with open-loop payments and more focused on controlled environments such as an employee cafeteria. In this way, users get the benefit of using the chip for an everyday transaction but reduce the chip’s usefulness to hackers if it is somehow compromised.

‘Amazement and interest … skepticism and fear’
As a digital innovation firm, Epicenter likes to test and trial new technologies. Epicenter’s chief disruption officer, renowned Swedish biohacker Hannes Sjöblad, discovered the technology at a conference. He and BioHax CEO Jowan Osterland came up with the idea to support the chip at Epicenter.

When Epicenter first offered the option, employees’ reactions varied from “amazement and interest to skepticism and fear,” says Epicenter spokeswoman Josefin Albrektson.

Sjöblad has organized a few events where members can have the opportunity to implement the microchip, which is based on Mifare and NFC standards.

Epicenter has more than 4,000 members from over 350 companies. Of this user base, about 75 people have opted for the chip. Nine of Epicenter’s 12 employees have also volunteered for the chip. An additional 75 people from outside Epicenter have had their implants done at Epicenter open events.

“Epicenter members that have the chip have said they really enjoy having the chip,” Albrektson says. “Not only for the storytelling around it and that people think it’s cool, but also because it makes their life easier when they don’t have to remember the key to the office, etc.”

Epicenter runs about one implant party per quarter, based on user interest, and about 20 to 30 people get implants at each event.

The chip comes inside a prepacked, sterilized and sealed syringe that is used to inject it into a person’s skin by a licensed professional.

Employees older than age 18 can opt for the chip, which costs them about $150 USD, at their own expense. Albrektson offers assurances that the chips are “100 percent voluntary” and available on an active-consent basis.

“We do not implement microchips in our staff nor monitor them,” she says.

Albrektson stresses that the procedure is not part of any human resources or member policy that Epicenter or its member companies have. “No one is asked to insert and implant. No one is hired or fired if they have the chip or not,” she says.

Epicenter employees use the chip mostly for access control, but it also allows them to unlock doors, share digital business cards with Android users and buy snacks from the office vending machines.

The chip does not contain any credit card account information. Rather, employees can load money onto a kiosk account so that when they visit a vending machine, they use the chip to identify themselves and accept the purchase.

Individuals both inside and outside the company can use their chips to access participating gym chains, for domestic railway travel and on any readers that support NFC.

The biggest disadvantage Epicenter users report is that it is sometimes hard to use the chip in the right way because of how some chip readers are positioned in relation to the chip’s location, Albrektson says. The chip has to be placed directly on the reader, and sometimes the reader is mounted in a door and can be difficult to reach.

Much like Epicenter, Three Square Market, in River Falls, Wis., saw a similar benefit to offering chips to employees. The firm designs software for self-service “micro markets” for office breakrooms. The chip allows company employees to make purchases in their own break room micro market, as well as open doors, log into computers and make copies.

Three Square Market publicly stated that it envisioned the technology as another payment and identification option that could help grow its self-checkout business.

The ethics of implantable payments
Critics of the chips have raised concerns about privacy and employee tracking. Albrektson maintains that the implants are “passive chips,” meaning they have no built-in power supply and subsequently cannot transmit signals about their position. The chips get their power and send data when a reading device is applied directly over the chip.

“If a person is worried about being traced, your mobile phone or internet search history poses a bigger threat than the RFID chip we use would ever do,” she says.

When chipped employees stop working at Epicenter, they keep the microchip, unless they decide on their own to remove it, which they can do at their own expense at a tattoo or piercing center.

Rick Oglesby, president of the market research and consulting firm AV Payments Group, says he doesn’t object to the sale of chip implants to the open market, but he does take issue with offering them in a workplace setting.

“If you do something in an employment environment, there’s some implied coercion there,” he says. “Even if you have the most open work environment that you can possibly imagine, there’s still an inherent pressure to do some of these things.”

Oglesby is also skeptical about whether the benefits of implants outweigh their invasive nature.

“We’re dealing with an environment where consumers aren’t really adopting using their phones to make a payment, much less going to a medical facility and having something implanted so they can make payments even more convenient,” Oglesby says.

For widespread adoption to happen, he says consumers will need a more compelling reason than convenience. Consumers would need multipurpose chips that allow them to do something new and different that they can’t do now without a chip, such as improving vision.

“They’re going to be chips that basically put your smartphone in your brain so you can access a whole slew of functions and capabilities and where the value proposition is strong,” he says.

Oglesby predicts there will come a time when people have chips implanted in their bodies on a scale basis. But it won’t be for the limited purposes of making payments or opening doors.

“It’s a concept that will probably have its day at some point,” he says. “But it’s way too early for that.”