You can just type in a credit card number, address, CCV, and expiration date once into say the Apple Store and then buy stuff from them with one click from that point on. The same is true for Amazon and Paypal and lots of other cos. And you can do it on your iPhone today.
So there is no reason why you can't just have a Paypal app on your iPhone which has two fields: email of the person you want to pay and amount to send. Type that in and everything is done on the server. No hardware dongle or physical proximity needed, you can deploy everything in software.
Starbucks or the like could have a simple mobile web site ordering interface. Maybe use some geolocation to determine when you're in a store, but otherwise use their existing corp website and ecommerce backend.
Some might argue that the dongle gives more security -- but it's weird that you would want MORE transactional security (physical card swipe) when you can see the person than when they are ordering over the web.
that said...I guess this might have some advantages for people receiving payments, as a swipe is quicker than getting your customers to input their info. Also might be faster for payers who buy a lot of stuff online from different merchants and don't save their cc info with them. I guess one would have to know how cheap mobile credit card swipers are today.