Apple Wallet in iOS 27 Uses AI to Digitise Physical Passes and Split Bills

Apple has significantly expanded the capabilities of Apple Wallet in iOS 27, evolving the app from a digital card repository into an AI-driven utility hub. The update introduces native custom pass creation and automated financial tools designed to eliminate the need for physical wallets and specialized third-party management software.

Central to the update is the ability for users to natively create custom passes for services that do not officially support the platform, such as Costco or local gym tags. By utilizing Apple Intelligence, users can either use provided templates or simply photograph a physical pass to digitize it. Additionally, a new bill-splitting feature allows users to scan physical receipts via Apple Intelligence to settle payments exclusively through Apple Cash. The ecosystem also continues its expansion into digital identity, now supporting digital driver's licenses and state IDs across 15 US states and Puerto Rico, alongside virtual US passports for domestic TSA checkpoints.

The Evolution of Digital Identity

Apple Wallet began as Passbook in 2012, originally serving as a simple repository for boarding passes and movie tickets before being rebranded in 2015. Over the last decade, it has transitioned from a convenience tool into a comprehensive digital identity and payment ecosystem. The current trajectory focuses on deep OS integration, moving away from static storage toward active automation. By incorporating AI-powered tools directly into the operating system, Apple is systematically removing the friction associated with physical-world interactions.

Obsoleting the Third-Party App

This shift toward integrated AI financial tools and custom pass management signals a strategic move to make the iPhone the sole necessary device for daily life. By absorbing the functionality of specialized apps—such as those used for bill splitting or membership management—Apple is effectively obsoleting an entire category of third-party utilities. As Engadget noted, "In classic Apple fashion, a third-party app category has been made obsolete with a new Wallet feature in iOS 27."

The Path to a Walletless Future

As Apple continues to integrate transit, key management, and government-issued identification into a centralized hub, the reliance on physical leather wallets continues to diminish. The industry is watching to see how other OS providers respond to this aggressive integration of AI and identity. While the current rollout of digital IDs is limited to specific US jurisdictions, the infrastructure is now in place for a broader global expansion of virtual credentials and automated financial settlement.