Apple prepares a receipt-scanning bill splitter for iOS 27.

      TL;DR: Apple is introducing a bill-splitting feature in iOS 27 that allows users to take photos of receipts, assign items to different individuals, and create Apple Cash payment requests. This feature, anticipated to be revealed at WWDC, will compete with services like Splitwise, Venmo, and Cash App.

      Apple is working on a new feature for the iPhone that enables users to capture a restaurant receipt, allocate individual items to various people, and automatically generate payment requests via Apple Cash. According to Bloomberg, this tool will calculate each person's portion of the bill, including the costs of items, tax, and tip. The feature is set to be announced at the upcoming Worldwide Developers Conference and included in the iOS 27 release this fall.

      This function will be accessible through both the Wallet app and Messages, with the ability to approve payments from an Apple Watch. Following the announcement, shares of PayPal and Block, which owns Cash App, saw their gains diminish. Apple has been competing with Venmo and Cash App in peer-to-peer payments since incorporating Apple Cash into iMessage. However, this new bill-splitting feature represents a more direct challenge to the market dominated by third-party applications.

      The Significance of Receipts:

      Apps like Splitwise, Tab, and Settle Up have cultivated dedicated user bases focused on dividing group expenses. Most of these applications require users to manually input amounts, which can lead to errors and inefficiencies. In contrast, Apple’s method of photographing the receipt and employing image recognition to identify individual line items eliminates the need for manual entry.

      The integration of Apple Cash ensures that the entire process, from capturing the receipt to receiving payment, remains within Apple's ecosystem. Users won’t need to download additional apps, set up accounts with third-party services, or link a bank card to a new platform. Since the launch of Apple Pay in 2014, Apple has consistently expanded its payment infrastructure, making the ecosystem increasingly appealing for users who rely on iPhones for daily transactions.

      Apple’s Track Record in Fintech:

      The bill-splitting feature is part of Apple’s ongoing fintech expansion, which has seen mixed outcomes. Apple Pay is among the most widely used contactless payment methods in many regions. The introduction of Apple Cash for peer-to-peer payments, the Apple Card credit card in collaboration with Goldman Sachs, a savings account backed by Goldman, and tap-to-pay options for businesses have all followed suit.

      However, not all initiatives have been successful. The partnership for the Apple Card has negatively impacted Goldman Sachs' financial performance, and the bank is attempting to transfer the business to JPMorgan Chase. Additionally, a “buy now, pay later” service was discontinued about a year after its launch. This pattern indicates that Apple is willing to take risks in fintech but is also quick to retreat if a product struggles to gain traction or if partnerships falter.

      The Competitive Landscape:

      The most direct rival is Splitwise, which has established a loyal user base for tracking shared expenses across households, trips, and recurring group costs. However, Splitwise requires users to manually access the app and manage balances, a process that Apple’s integrated solution could simplify for casual scenarios like restaurant bill splitting.

      Venmo and Cash App operate at a different level, each offering comprehensive payment platforms that include social feeds, merchant payments, and various financial products. The fintech environment is rapidly changing, especially with the emergence of AI-driven banking platforms, yet Apple’s advantage lies in its distribution. Every iPhone serves as a potential bill-splitting device without the need for downloads.

      This feature also aims at younger consumers who primarily manage their finances through apps rather than traditional banking. Mobile payments platforms worldwide are striving to attract this demographic by integrating financial tools into apps frequently used, and Apple’s incorporation of bill-splitting into Messages places it within the context of group dining discussions.

      Part of a Larger iOS 27 Update:

      The bill-splitting service is among several additions to the Wallet app in iOS 27. Apple is also developing a tool that will allow users to create digital passes for events, gym access, and more. The Wallet app currently includes features like a savings account, Apple Pay, and digital keys for vehicles and homes.

      The broader iOS 27 update will concentrate on artificial intelligence, featuring a revamped Siri digital assistant, AI-enhanced photo editing tools, a new Siri camera mode, and enhanced performance. Apple has positioned iOS 27 as a significant upgrade in AI capabilities, while subtly strengthening its position in the realm of everyday financial services through the Wallet enhancements.