Credit card companies have tried just about everything short of surgical implantation to make themselves customers' first choice when payment decisions are made.
And that next step may not be so far off.
MasterCard International is one of a handful of financial services companies at least discussing the possibility of using an advanced breed of wireless chips as a payment device to be implanted under the skin.
One version of the device has already been implanted in several hundred people around the world, either as a form of identification or to carry health information, according to Scott Silverman, the chief executive of Applied Digital Solutions Inc., whose company provides the VeriChip device and who himself has had one implanted.
Mr. Silverman said his company is in talks with MasterCard and two banks on ways to use the VeriChip for payment applications.
Art Kranzley, the chief e-business officer at MasterCard, said the Purchase, N.Y., association is not working on such a project, but he did note several applications were possible along the lines of PayPass, the contactless card it has been testing.
"This is a technology that can evolve in many different directions," he said. "It could be worn on clothing or even implanted under the skin."
ADS, of Palm Beach, Fla., developed the VeriChip for identifying animals, such as pets or livestock, and Mr. Silverman said more than 30 million devices have been implanted in animals worldwide since it was introduced in 1987. The device, roughly the size of a grain of rice, uses radio frequency identification technology to transmit a unique identifying number to an external reader.
The company has modified the device for use in the human body, and the first human implantation was made in September 2001, after the terrorist attacks. Mr. Silverman said that the chips are currently used primarily for identifying individuals and that there has been strong interest from emergency workers for using the chips for this purpose.
However, the ability to link a unique ID code with an individual offers several potential applications. ADS is awaiting approval from the Food and Drug Administration to link the number with a database of medical information; about 10 people in Mexico already have VeriChips for this purpose. Though the FDA is evaluating the concept of creating and updating a medical database, Mr. Silverman said that it will not regulate the implantation of VeriChips for nonmedical purposes.
The implantation is done via a syringe, typically in the upper right arm near the triceps muscle, while the patient is under a local anesthetic.
MasterCard has been testing its PayPass product since the start of this year, and Mr. Kranzley is planning a mass rollout next year. Initially his company will focus on promoting it as a credit card, though it has also tested putting the components into a cellular telephone.
And while he said it is not something that he could imagine hitting the market for several years, Mr. Kranzley said an implantable credit card is a viable option. "Down the road, I can see that technology evolving."
Mr. Silverman was guarded in his timetable for adoption.
"In three to five years, this could be a potential replacement for a consumer's primary credit card," he said, "but they are ready to be implanted now."
VeriChip would initially provide just the identification information to authorize card-based transactions, but the next step would be to link the ID code to a credit card account and allow people to make payments using only the chip, Mr. Silverman said.
Not surprisingly, some observers say the technology poses serious threats to personal privacy.
John Soma, the executive director of the University of Denver College of Law's Privacy Foundation, said that the chips could be used to create a digital log of where people go and what they do. "Once it's in you, one way or another, people will be able to track you."
The devices are small, but the signal can be read from as far as 50 feet away, depending on the size of the reader and its antenna. In a study of salmon migration patterns, the Department of Energy set up readers inside tunnels within hydroelectric dams in the Columbia River, to monitor the movements of millions of chipped fish.
Mr. Soma said applications like these open the door for either criminals or government agencies to install readers on any street corner to capture personal information as people walk by.
Though Mr. Silverman said this would not be possible, because the system uses a proprietary format and ADS would restrict the sale of readers, the privacy advocate said he was not convinced that such measures would be enough to safeguard the data.
"Once the information is available and has been captured, it can't be put away," Mr. Soma said. "It will be used."
