If you notice, that's how Square is proceeding.  Step 1 is to get merchants onboard using new software, but the payment methods are the same yet (magstripe swipe or cash).  Added to that is the optional mobile data (where the customer's presence is shared with the merchant ... "pay using your name").

Once there are enough users doing that, Square can switch to having accounts the app also function as a wallet so that transactions for mobile users don't go through their credit card anymore.    Square can do this because the fraud rates are lower when GPS data + security at the merchant's point of purchase (e.g. video cameras, face-to-face transaction with a cashier) makes fraud harder to get away with.

Here's how Bitcoin can piggyback onto Square's progress though:
 - https://bitcointalk.org/index.php?topic=2732.msg843575#msg843575