I think that the other vendors who want into the payment processing business are going to have to consider the requirements to build a complete infrastructure to offer the service. That is really the secret suace of Square and why it is hard to compete against them-not because they have physically attractive hardware or because that 2.75% rate is easy to understand and consistent.
Square is just at the start in selling analytics-or bundling the service with payment processing and it is really on to something with CRM and campaigns. Almost all merchants need some kind of CRM and that it just not offered by the payment processing offerings of the other vendors. It is the capabilities beyond payment processing that have the greatest potential for this company and the real reason it might get bought by a PayPal.