[jareau]

I know Dwolla's FiSync protocol is being adopted by more banks and is zero-cost, but for Square to provide the consumer coverage most merchants expect they would have to wait for FiSync to get to a much larger scale.

How would Dwolla help Square cut out the CC companies?

[bigtunacan]

I think FiSync and Square both benefit from a vertical merger (I'm considering then to be in separate market spaces rather than competitors; which certainly could be debated). Both get a near term benefit of the expanded customer base which should help them expand. FiSync would benefit Square as would Dwolla Credit as a credit card alternative

Credit cards won't be immediately replaced as they are accepted virtually everywhere. I think Square could be positioned well to replace credit cards though using the old Microsoft model of embrace, extend, extinguish.

Embrace credit cards in the short game. Extend with direct payments (bank to bank and alternative line of revolving credit). Extinguish; pull the plug on the credit card companies once they achieve high enough rate of adoption.