We’ve all heard plenty about the concept of the digital wallet—I’ve written about it here more than a few times. But Apple’s announcement about a new app that will be part of the new iPhone 5 iOS makes it official. Your wallet will soon be coming out of your back pocket and depositing itself squarely on your smartphone.

The app is called Passbook and it’s clear from looking at the prototype that this app is only the beginning. Right now the app aims to store your airplane tickets, loyalty cards, movie tickets, and coupons all in one place. Since the app is integrated into the operating system of the new phone, chances are more and more retailers will work to find ways to make their service work with Passbook, opening up possibilities we’ve only talked about until now…

It gets better, though.

The app has been built to be time and location-based, so the tickets will appear in your lock screen at the designated time. If your flight suddenly changes gates, the app will alert you of that, as well. And because it’s location-based, Passbook will present that Starbucks gift card as soon as you enter the store.

The only thing I can see that might be annoying about that is the fact that every time you pass a Starbucks, your gift card will likely rear its ugly head. If you live in America, you probably pass a Starbucks at least twenty times a day. Your lock screen will look like Starbucks gift card wallpaper by the time you get to your destination, depending on how close you have to actually get to the actual location before your gift card pops up.

Another way Passbook can allow stores to annoy us—I mean help us—is through coupons.

As you pass through the door of your favorite store, the app could flash a coupon on your lock screen. That’s all well and good, but what happens when you happen upon a shopping center with several participating retailers? Will they all then war for space on your lock screen? Just how precise will the GPS on this app be?

At the big iPhone 5 reveal, Apple announced it already has partnerships with various companies for the new app. Going by the brands displayed on the screen at Apple’s site, those companies probably include Fandango, Target, Delta, W Hotels, Starwood Hotels, Sheraton, American Airlines, and Starbucks.

Apps that store loyalty cards have already been available for some time. Functionality has been problematic, to say the least, with most complaints stemming from some cash register scanners being unable to read from a smartphone’s screen. Still, I’ve personally witnessed people using iPhone screens at airports for tickets with no problem, and if all of these major companies are lining up to be a part of Passbook, you can rest assured these companies will make sure their scanners can read the barcode on an iPhone 5, even if not so many people are using the app at first.

Still, it’s important to note that Apple is steering clear of calling this a mobile payment app.

The Wall Street Journal spoke with Phil Schiller, senior vice president of marketing for Apple, who hesitated to call the app a mobile payment system. As Schiller pointed out, mobile payment services are “all fighting over their piece of the pie, and we aren’t doing that.”

Whatever you think of Passbook, there’s no denying it’s a portal into a new frontier for iPhone owners. What begins as a way to stop carrying around boarding passes and reward cards will eventually grow to include credit cards and maybe even your driver’s license. As usual, Apple has integrated the technology into its devices—it’s up to the rest of the world make that technology as powerful as it can be.