It's not the stand they make money on, it's the 2.75% payment processing rate. That is higher than what competitors charge (closer to 2%), and as business grows that can add up to a significant premium. That is what drives them off of Square. So there's a kind of glass ceiling there.. to keep those customers Square would need to renegotiate a lower rate that trims down their gross margin.
Square does have a really good niche in the mom-and-pop shops where 2.75% is an ok price given the easy of signup and free POS system. But at the same time there may be significant customer acquisition and support and fraud costs in that niche.
Square does have a really good niche in the mom-and-pop shops where 2.75% is an ok price given the easy of signup and free POS system. But at the same time there may be significant customer acquisition and support and fraud costs in that niche.