These and other questions will be asked for months to come and then the realities will reveal themselves after the phone is released. You can be sure that Google will do a super job of marketing this phone. You can also be certain that Google is beating up the credit card organizations, banks and processors to get great rates on fees. But if they cannot get merchants onboard with this then it will fail.
Payment has always been the 'next' step for Google. They started with Google Check Out and now will add the mobile payment feature to this. Their strongest competitor in this play will be PayPal who is already working on getting PayPal into the physical point of sale.
It will be a very interesting play to see unfold.