‘Ick Factor’ and Biometrics Limit Market for Implanted Security Chips

Embeddable microchip
Three Square Market

A Wisconsin vending machine company made a big splash last week when it announced that 50 of its employees would get chips implanted in their hands to facilitate wireless payment for snacks as part of a voluntary test program.

Some observers welcomed the idea as a cool way to pay for stuff (or log into computers) without carrying a phone, credit card, cash or keying in passwords.

Others viewed the prospect of being “implanted” with a microchip with less enthusiasm. They argued that the notion of a healthcare professional, or a tattoo artist as was reportedly the case of that Wisconsin company, injecting a rice-sized chip into someone’s hand, is unsettling.

There is a perceptible “ick” factor that people need to get over if such implants are to take off, says Paula Hunter, executive director of the NFC Forum.

NFC, or near-field communications, is wireless technology used by many chips to communicate with chip readers. NFC facilitates Apple (AAPL) Pay and Google (GOOGL) Wallet payments, for example.

The upside of an embedded chip is that users wouldn’t need to carry their phone, credit card, or cash. The downside? Have I mentioned the “ick” factor?

Still, there are precedents for human-implantable chips. For the past year, Epicenter, a Swedish company, has implanted chips in workers that give them access to the office and computers. Going back further, PositiveID, once known as VeriChip, once sold implantable chips for tracking people’s medical data. It stopped doing so seven years ago due to concerns that the chips might be used for surveillance.

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Secure wireless log-in (minus the implants) is gaining traction. The new Tesla Model 3, introduced this week, offers both a Bluetooth-enabled mobile app as the vehicle’s key, and also comes with NFC-enabled cards for valets, mechanics, or others who may need to access and drive the vehicle.

Still, some see the need for people to carry anything—a phone, chip, card—to buy things or unlock their computers as so last decade.

Related: Wisconsin Company Holds Party to Implant Workers With Chips

“Getting an implantable chip sounds a lot like a drunken tattoo party—it’s a fun idea until you wake up the next morning,” says Brendan Miller, principal analyst with Forrester Research (FORR). For one thing, what happens when the technology changes and you need a new chip?

In his view, biometric technology, which enables a person’s fingerprint, retina, or voice to act as a key will be the next wave in security.

“NFC is fine for now,” Miller said. “It is fast, easy and secure if implemented properly and everyone has a mobile device so there is some ubiquity.”

Adopting biometrics will mean users won’t need their phone (or chip) to pay for lattes, unlock the office, or sign into their computers. “Your fingerprint itself can be payment authentication. And, facial recognition is getting really, really good, so that would work too,” Miller said.

With all that, there may still be a “creep” factor for people who distrust sharing too much of themselves with tech providers. But in Miller’s view, a face or fingerprint scan is a lot less creepy than implanting a foreign object in your body.

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