What happened to Google wallet, and why aren't merchants/users using it?

Usability is problematic from a user's perspective. It does nothing new, but it increases the complication of completing the transaction.

Also, since Google has customer service approaching nonexistent, who are you going to call if something goes wrong with the transaction or if there's fraud?

But what could go wrong, its only peoples hard earned money

you forgot amazon....I think out of all those companies amazon.com offers some of the most advanced payment integration options especially for startups trying to charge marketplace fees.

our startup http://stuFFLiX.com is using amazon.com we have found google solutions unacceptably poor, even paypal did not offer what amazon did. I am not surprised why the wallet hit the wall.

I used it at jamba juice about 3 months ago. I was the first at that location, and the whole staff came out to try and figure out how to get it to work. It took about 1.25 man hours (15 minutes * (4 staff + me)) to use the free $10 for joining!