Google Wallet certainly faced a lot of security concerns from the beginning, and now Google is trying to solve that. If you have an device that supports Google Wallet, and you are also rooted when you turn on the application you get a not supported warning.
The unsupported device policy states:
We are unable to support devices with unauthorized operating systems as the security layers of the device may be limited.
The app will still function as normal but there is a warning and hackers can still crack the security pin that protects Google Wallet.
This move is closely related to how Google took a stance on their movie service by not supporting devices that are rooted.
Via The Verge