1. A system for utilizing one or more preferred application lists (PALs) in a wireless device reader, comprising: a transaction terminal for designating a plurality of compatible application identifiers, wherein each of the compatible application identifiers is respectively associated with a transaction application that is compatible with the transaction terminal; a mobile wireless device provisioned with a proximity payment system environment (PPSE) application that is configured to store a plurality of user preferred application identifiers, wherein each user preferred application identifier is respectively associated with a transaction application stored on the mobile wireless device; and a wireless device reader for receiving the plurality of compatible application identifiers from the transaction terminal, for storing the compatible application identifiers among a plurality of preferred applications lists (PALs) which includes a first PAL configured to store a first group of the compatible application identifiers, wherein each of the compatible application identifiers in the first group is assigned a priority indicator, for receiving a PPSE list containing the user preferred application identifiers from the PPSE application in response to an initiation of a wireless transaction by the mobile wireless device, for determining one or more matched application identifiers by comparing each of the compatible application identifiers contained in the first PAL with each of the user preferred application identifiers, for identifying a single matched application identifier from the one or more matched application identifiers, wherein the single matched application identifier matches the compatible application identifier with the highest priority indicator stored in the first PAL, and for requesting transaction application data from the transaction application associated with the single matched application identifier.