I'd heard about e-wallet functionality several years back and the idea seemed kind of lame at the time, but NPR featured a story on them as they relate to the Japanese cellphone culture and the iPhone's lagging sales there.
What is an e-wallet?
An e-wallet is an electronic storage mechanism inside of a cell phone which can store, access, and utilize payment resources, such as credit cards and debit cards.
iPhone Japan lacks an e-wallet?
It's true, but while the iPhone is a major step here in the States and many other countries, the iPhone is a bit of a laggerd in Japan. There the cell phone has been a significant popular commodity for some time, and the marketplace is rife with choices for consumers. In the US, the cell phone market is so heavily guarded by the wireless oligopolies, and the majority of cell phone customers require business reliability, not convenient or trendy features. This seems to have resulted in a lack of choice for cell phone consumers. And of the choices you have, your options with those devices are limited - i.e. you can't buy a phone from one company and use it on another network. Does that make sense to you?
Apple and Google
It's taken Apple's iPhone and now Google's wireless initiative to shake things up for the United States cell phone marketplace. Hopefully that will bring us up to speed with Japan! I wonder if and when Android powered phones will be available in Japan? Will they seem like dinosaurs?
This all eerily reminds me of how long it took Verizon and other national telecommunications carriers to roll-out truly high speed internet access (its still a work in progress as I write this). The US was way behind in consumer availability for high speed connections, and what little choice they had was expensive and comparatively slow. Its taken VOIP to get Verizon to take a bite out of Comcast's cable lunch: IPTV.
My caveman brain gets really nervous when I think about having all my private data like credit card numbers stored on my cell phone. I guess it would be no worse than having a wallet stolen. What happens to that data when you decide to get a new phone?
Its encrypted, and if you can train yourself to memorize a string of either random alphanumeric characters, you're e-wallet would be substantially more secure by several orders of magnitude. Even so, the distance between our world and the virtual world of data is so great that I bet many people feel uncomfortable with the idea as you describe.
You can likely securely delete it, but actually I'm not sure. Best bet would be to toss the phone in Lil' Chipper.