Gogle Mobile Wallet

Google has just lounged the new Mobile Wallet which allows the people to to store their credit cards, loyalty cards and coupons. This is NFC enabled mobile phone which is extremely secure and personalized with a PIN code. The NFC antenna is only activated when the screen is powered on. The secret code is given to the user, and for transmission  of payments that specific PIN is required which make it safe and secure.

How it works?
                        An NFC-enabled phone has a payment application (credit or debit card) issued by the consumer's financial institution installed on the phone. The application and encrypted information are loaded on a secure area in the phone. The phone uses the built-in NFC technology to communicate with the merchant's contactless payment-capable POS system, similar to the contactless payment cards and devices in use today. The payment and settlement processes are similar when the consumer pays with a traditional contactless or magnetic stripe credit or debit payment card.

NFC as a technology is inter-operable and compatible with the underlying grid of hardware, security elements, regulations and communication protocols which make the payment machinery work.
The payment mechanism has multiple rails which are being managed by various stakeholders. Multiple computer systems running multiple software programs keep the system greased. Pymts.com explains the process of how the plumbing works.
When a credit card is swiped a POS terminal "sends the card information with details of the transaction to a switch. The switch, which may be operated by a variety of payment players, has a software program that decides what to do with the transaction. It will send it on to a merchant processor that will keep track of the details of the transaction and act as an intermediary with a clearing and settlement system which will contact the bank processor that acts on behalf of the bank that issued the card or possibly the bank itself. Many software programs running on numerous pieces of computer hardware are involved in the various steps in the process."

The above stated example is about the credit card rail and similar such structures exist for other forms of payment as well. NFC-enabled mobile payments also have to tap into this plumbing, a task which would require setting up a software platform over the grid which can communicate over the rails. Google with its Mobile Wallet is attempting to build such a platform and then by opening system through APIs, it give plugging points to various partners to tap this system.
 
Open Mobile Wallet
                                     Development of a platform which "would embrace a technical architecture that enables the wallet to support a wide range of payment methods and networks, would comply with agreed upon industry business rules and standards, would employ a secure element or container in the mobile phone to interface with the mobile payment applications, and would utilize appropriate wallet protocols and processes, such as the ability for multiple payment applications to share the wallet." Apart from the chicken-and-egg problem which proximity mobile payment or NFC-aided mobile payment faces, other issues like -- fine-tuning of regulatory issues as mobile transactions will cross over domains covered by multiple regulatory agencies, a common technology standard, dynamic data authentication method for security and common platform that taps the existing clearing channels and rails -- is essential to the mass adoption of the NFC-enabled mobile payment technology