First: Yes, you'll really be able to use your smartphones to pay for stuff. Google Wallet utilizes near-field communications (NFC) technology to send very short-range signals to nearby NFC tags to complete payments - or as Google tells it, you'll only have to tap your smartphone on a store's credit card processor and you're good to go. Obviously, the store you're in will need to have NFC tags embedded into its credit card processors in order for your Google Wallet to work properly. To that end, Google has lined up 15 big-name merchants that will accept Google Wallet payments starting today, including RadioShack, American Eagle Outfitters, Subway, Macy's, Footlocker and Walgreens.
Second: You can take any of your credit cards and transform it on your smartphone into a "Google Prepaid Card." Google describes the card as a "virtual card" that can be funded with any existing credit card. In a lot of ways, it's like transferring funds from your checking account into your PayPal account - you essentially put a predetermined amount of cash into your Prepaid Card and you can use it to pay at any store that accepts Google Wallet. You also have the option of having a Citi MasterCard embedded directly on your phone and of storing digital gift cards on your Google Wallet that can be used at participating stores.
Third: Why yes, Google Wallet does have security features. You obviously wouldn't want someone to steal your smartphone and use it to go on a $10,000 shopping spree, so you'll really want your Google Wallet to have top-notch security. With this in mind, Google is initially offering three key features to keep your virtual wallet secure. The first is a simple PIN number that Google says you'll need to enter before making any purchase; or put another way, the same basic security measure that you enact every time you pay with your debit card.