The Gap has enabled Google Wallet at 65 San Fransisco Bay Area stores (Gap, Old Navy, Banana Republic, Banana Republic Factory Stores and Gap Outlet). You can still only pay with MasterCard and a Google Prepaid Card, which you can fill with another credit card. Eventually Google wall "accept" all sorts of cards into Wallet.
To promote the initiative Gap is giving Google Wallet users 15% off. The deal is presented in the Google Wallet app, in the "offers" area.
Google doesn't "see" any of the transactions today (and may never see them precisely). It only knows a transaction was made and the city in which it was made. It doesn't know the amount, the item or the store. However the Gap, in this case, knows all that information.
Beyond the fact that this represents a convenience for the consumer it offers a powerful analytics capability to the marketer. In the not-too-distant future brands and marketers will be able to track promotions and ads to the point of sale with services like Google Wallet. In a lower-tech way Foursquare offers a similar capability through check-ins. The larger point is that NFC, check-ins and point of sale integration are starting to enable marketers to get more visibility on online-->offline transactions (or traditional media to POS). This is a major development and the arrival of a new form of analytics.
By the day there's some new mobile payments announcement it seems. Indeed, the world of mobile payments is starting to get pretty noisy and potentially confusing to merchants and consumers. Visa, Amex, Mastercard, Verifone, Google, Apple, mobile carriers, eBay/PayPal, Square, Intuit and others are all competing for consumer and merchant attention. While not all of these players are directly competing, many of them are.
On the merchant side there need to be standards or at least compatible systems to enable mass consumer adoption of mobile payments. Fragmentation or different standards and systems will confuse and frustrate merchants and consumers alike, and only delay adoption.
Very small merchants and service providers will likely turn to simple-to-adopt services like Square. Larger entities will ultimately adopt NFC-based systems I suspect. Broad adoption by retailers like the Gap helps the cause accordingly.