Shoppers could soon pay for goods using a microchip implanted under the skin, according to a report in The Times newspaper recently.

Mal Fletcher

The idea, says the report, is already catching on with today's iPod generation, with one study showing that one in 10 teenagers and one in 20 adults already willing to have a microchip implanted to pay shop bills and help to prevent identity fraud.

The VIP Baja Beach Club in Barcelona already uses implanted human body chips to identify its exclusive clientele - ostensibly because wearing bikinis and shorts leaves nowhere to carry wallets and purses. Members use the chip to gain access and to pay for services.

Made by the VeriChip Corporation, the chip is a glass capsule which sits under the skin. It carries a ten-digit personal number that can be linked to a person's bank account.

For decades, certain prophets of our time - both Christian and secular - have warned that we're rapidly moving into a dangerously uncertain, cashless world.

For centuries, cash money ruled the world: a world where most people traded on a local scale and where nation-states could govern their own economies and produce their own currencies.

Today's world is very different. International trading pacts drive macro-economies and everything is linked to everything else all across the globe. A financial sneeze in one major trading centre can cause whole nations to catch cold - on the other side of the world.

To serve this new economic landscape, we've invented digital alternatives to cash.

The first step in the move toward a digital economy was the introduction of the now ubiquitous credit card. The process took a giant leap forward, though, when computer chips were added to those cards.

Meanwhile, the mobile phone market offered hungry companies a hot new way to offer digital cash services.

Phones have three great advantages over cards. They have keys; they have transmitters; and they have enough memory and power to handle big processors and software for encryption and accounting. The mobile phone is an amazing banking technology, because it's so convenient for the user.

The big new developments in the digital cash world are driven by tools such as Radio Frequency ID tags (RFIDs for short).

Each one of these tiny devices is basically a radio barcode. It's smaller than a grain of sand, yet it contains hardware, software, permanent memory, an operating system, and the ability to write and receive data. It transmits over small distances using short bursts of electromagnetic radiation and its built-in power generators could last up to 100 years.

(Ed: For more on this, watch Mal Fletcher's interview with futurist Dr. Patrick Dixon).

Before we dump cash altogether, we should take a long, deep breath and consider a few facts.