Google Wallet's single-biggest problem to date in the US has inarguably been carriers. US carriers (except Sprint) wouldn't allow Google the necessary control of the "secure element" in order to make NFC payments, and as such, Google Wallet consumer adoption has essentially been trivial. With Android 4.4, that finally changes.

The new version of Android completely eschews the secure element paradigm and has instead opted for a virtual solution, using what Google calls "Host Card Emulation" technology to get the job done. Emulation, in layman's terms, essentially means virtualizing a piece of hardware such that a computer acts as though it's interacting with a physical device. The whole "physical device" issue was what got Google Wallet in trouble with carriers, but the new HCE solution means that there's no hardware to bicker over - everything is software-based.

Specifically, Android will emulate a ISO/IEC 7816-based smart card, which uses the contactless ISO/IEC 14443-3 protocol for transmission. Do not ask me what those numbers mean, but Google claims these standards are widely used in the NFC payment infrastructure as it exists today. If you want to get technical, check out the source link at the bottom of this post.

Google also claims any app will be able to access the HCE feature, including for the purpose of payments. That's extremely cool. Other applications include things like security access cards, transit passes, gift cards, and pretty much anything else that can be used with NFC.

So, what's this mean for Wallet? In theory, every Android 4.4+ device should just work with Google Wallet as long as it has NFC. Being part of the core Android OS also means carriers and OEMs can't strip out the functionality, as it would be a violation of their CTS certification agreement with Google. Stick that in your pipe and smoke it, Verizon.

It's unknown if enabling the functionality for the new SE-less Wallet payments will require and update to the actual Wallet app, but you can safely assume that if it is, it's coming soon.

Android Developers