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By paying with Google wallet, Google knows exactly what you bought, at which store, and even at what time.
No they don't. They know how much you spent, when and where. They have no idea what you bought, except it's something that is traded at wherever location.
You have to realise that it's easier to believe "Google is spying on your card usage" than actually doing any research or understanding how the technology works. This is the internet after all.
Google's Gemini AI says they know the details of the transactions. The link Google provided as a source was this which says they collect your data:
https://support.google.com/googlepay/answer/10223752?hl=en&co=GENIE.Platform%3DAndroid#zippy=%2Cinfo-that-google-wallet-may-collect
They still don't get a list of items you bought. Is running a request for payment, it's not billing a list of stuff.
Okay but how is it spyware
The dictionary definition:
"software that enables a user to obtain covert information about another's computer activities by transmitting data covertly from their hard drive."
Just because a program tells you it's collecting your data in the fine print doesn't mean it's not spyware.
Is it covert if you know it's happening and have agreed to it?