Could this be used as a solution for merchants to accept DVC?
Yes, exactly. But, in a paypal like way. That is, people will spend amounts from the balances they have in the DVCbank.
It has nothing to do with blockchains, so will not be any help in having people pay using on the blockchain coins.
Just DVCbank balances denominated in devcoins, not actual real "specie" on the blockchain.
Though it is java so maybe with suitable bounties modules can be made for Cyclos that do deal with blockchains...
-MarkM-