Well, the Ferengi universal translator is implanted - somewhere inside their ear. When Janeway and her away team encountered abducted humans from the early 20th century; she pointed to her com badge when explaining the universal translator. They've always kept it ambiguous. According to Memory Alpha, it was referenced at least once as a wand-like device in the TOS episode, "Metamorphosis."
Somewhere, perhaps in a book, I got the impression that it had been suggested that there was a telepathic element to the circuitry of the translator. In that same wiki article, it does say something similar was proposed and dismissed in an early proposal for the series.
"I'm in it for the power and the free robes." - Harry Stone
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