Remember though Bitcoin isn't free.

depending on the state of the users wallet, they may have to pay a btc fee to transfer to the merchant.
If the merchant is moving a lot of payments to the exchange each day they will probably also have to pay a BTC transfer fee.
The merchant will have to pay a fee to trade the btc on an exchange.
They will have to pay another fee to move their USD off the exchange into their account. If they aren't in the US, this fee will be quite big if it has to go through, say, LR.
The merchant will also need to either accept the risk of exchange fluctuation, or add an additional fee on the service to 'insure' against this.

Its not a very clean process right at this stage.