Stephen Gornick interesting in theory, but I think it's a bit trickier to move from mag strip (which triggers the debit or credit card networks) to ACH like Dwolla. When a card is swiped the "merchant acquirer's" bank/card processor is contacted to effect clearing settlement.  It is possible that Square could put in a middle office that takes all mag strip "calls" and routes them according to "on us" vs "off-us" transactions where "on us" are transactions where both parties have Square "wallets" and thus like Dwolla would be a cheap ACH transfer.  So, while I can see the utility developing a large user base, I cannot yet imagine how Square is not just another interface into the Visa/MC networks.