Here's a snip:
A wallet phone is simply a phone that can store the same data as the paper or plastic in your wallet -- credit card, ATM and debit card information -- and possibly receipts, ID, coupons, tickets, business cards and more -- in a way that lets you use that data for financial transactions.
They make that data usable through either a wireless chip -- a "contactless," or Near Field Communication (NFC) system; the SMS feature of the phone; or by displaying an on-screen bar code that can be scanned. Note that the industry doesn't need to standardize on one of these methods -- any phone should be able to do all three.
Wallet phones will be able to act both as mobile terminals (conducting secure transfers and transactions over the phone's Internet connection) and also functioning as smart cards, which replace cash even when the phone has no connection or battery life.