People do not have an unlimited amount of btc... So eventually they have to buy some and finding your local bitcoin freak and meeting in a coffee shop does not appeal to many. Lets face it... The average person getting into bitcoin takes a haircut. And the person who gets those btc more then likely will want fiat. That is why their will be a huge race by people to create exchanges over the next year. It is a stupid money making machine once setup.
TBPH, I believe Bitcoin payments will not replace fiat any time soon. But I also believe that many efforts are already ongoing and will continue to create upper layers on top of the Bitcoin blockchain.
Imagine the internet back in the 1980's (don't know how old you are... but supposing you know a bit of tech history). No one would have believed that the average person would start a Telnet session to their bank to pay their expenses. Yet, the underlying TCP/IP technology had started the revolution, and it was only a matter of time before application layers like HTTP and client software like NSCA Mosaic and then Netscape attracted the masses.
30 years later, it's commonplace to use e-banking solutions to pay the bills from laptop, mobile or tablet. Interestingly, the data is still carried over the same TCP/IP as far as the lower layers of the transmission are concerned. The revolution was already started back then, but no one, except the early adopters, was seeing it coming yet.