Is Apple’s Support of a Digital Passport a Step in the Right Direction for DTCs?

It’s been made official with Apple announcing that U.S. citizens will be able to carry a digital version of a passport within Apple Wallet as part of its iOS 26 update with the Transportation Security Administration (TSA) also confirming that it will accept the digital credential as a valid form of ID for domestic flights.

Although being touted as a revolution in the travel and border security domain, the fact remains that the digital variant will not replace the physical passport, used as a counterpart to the physical for a specific use case, with that being for domestic flights within the United States only.

Much market noise and hope has been touted for the DTC market, but despite being akin to a DTC Type 1, Apple’s variant is not. Apple’s solutions is specific and somewhat limited in scope, designed to streamline identity verification for domestic air travel within the United States only. Despite this, it is a very savvy move by Apple, adding another use case to its wallet platform, creating further user and brand stickiness, and reliance on Apple devices and its ecosystem.

Not being aligned with the International Civil Aviation Organization (ICAO) standards means Apple’s version cannot be DTC classified, with the ICAO standards defining how a DTC should be created, securely stored, and verified. On top of this are stringent requirements related to global interoperability that the ICAO is setting out to help bring DTCs to the international scene.

Despite this, Apple’s move into the digital passport space should be viewed as a positive move, and a natural stepping stone to a broader and more functional DTC. The Apple solution may create demand for an internationally recognized DTC, exposing users to a digital credential, improving understanding of how it works and how it can be used to simplify identity and boarding processes, and helping drive demand for additional international use cases and ultimately accelerating DTC efforts.

For now, though, the DTC market is one of extreme complexity, not just in terms of the ecosystem, partnerships, and business models, but also in terms of the different types, with Type 3 considered the Holy Grail and ultimate end goal. The market is someway off Type 2 and Type 3 large-scale implementations, with use cases focused on Type 1 for now. However, exposure to a digital variant will only help push the market for a broader more functional DTC and could help accelerate development from technology, standards, and ecosystem perspectives.

There is a lot to unpack as it relates to DTC and the supporting standards. Active vendors need to better understand potential adoption and implementation timelines in order to better strategize, invest, and innovate.

Type 1 Focus Until 2027

• Capitalizing on momentum generated throughout pilot activities in 2024, trials and testing of Type 1 DTCs continue, building to a crescendo in 2027 when widespread adoption of Type 1 DTCs is expected.

• Further concretization of the supporting infrastructure for DTCs is expected to bolster the market, with updates to biometric and e-gate technology at border control, as well as improvements to Information Technology (IT) infrastructure to support border information systems expected throughout 2025 and 2026.
• As Type 1 penetrates global markets, testing of Type 2 DTCs ramps up. Given the need for global interoperability, the ICAO’s decisions operate as a fundamental anchor to the DTC market, with technical standards for Type 2 and Type 3 DTCs not expected until 2026 at the earliest.

2027 May Be the Year for Type 2 Progression with Commercial Deployments in 2030 Likely

• While some projects trialing Type 2 DTCs began in the 2023 to 2024 period, pending standards continue to hamper adoption of type 2 in the shorter term.
• However, by 2027, the guardrails proffered by the technical standards present an opportunity for Type 2 DTCs to come into their own, spearheading significant growth, including a surge in investment in pilot and deployment projects.
• Type 2 DTC trials will benefit from pre-existing infrastructure developed for the purpose of Type 1 DTCs; however, depending on the conclusion of the Type 2 and Type 3 standards, further operational costs may be an obstacle.
• The DTC market will continue to gain traction with earlier efforts in building supporting infrastructure, limiting the need for substantial capital investment in this phase. While Type 2 DTCs may be commercially available as early as 2028/2029, there will be a necessary transition period before they are widely adopted around 2030, at the earliest.

There Is a Long Way to Go Until Type 3 Becomes Feasible

• Given the looming deprecation of the RSA and ECC algorithms by 2030, quantum-resilience is at the forefront of vendors’ and countries’ agendas, presenting further opportunities for innovation and investment. Innovative use cases translate into opportunities for vendors to drive additional revenue; for example, Type 3 DTCs can be uniquely used in emergency and remote provisioning settings. However, testing and deployment of Type 3 DTCs requires a major swing in mindset from supporting countries and passengers, delaying Type 3’s breakout into the mainstream. Additionally, moving to exclusively digital credentials, without a physical counterpart, is improbable, with Type 3 likely to be leveraged alongside its predecessors by 2040, at the earliest.

Apple’s foray into digital passport support is a potential positive for the broader DTC market. The transition from physical to digital passport use will take time, linked to consumer understanding and confidence. Exposure to a mobile use case will help stimulate these factors and, in turn, help drive demand from an end-user standpoint, driving further emphasis on DTC innovation, which may help speed up implementation and adoption timelines.