&gt; charges stores less than what Visa charges<p>Their flat rate of 2.75% is substantially more than what Visa charges for &quot;card present&quot; transactions. The highest cost cards are 2.4% but they&#x27;re going to be a small portion of most stores&#x27; card mix. I&#x27;d think most shops cost Square 1.1-1.5% across all their transactions. Debit volume exceeds credit volume in the US -- most people are swiping their bank check cards, not commercial purchasing cards and the highest end reward cards that require pristine credit -- and the Durbin amendment capped the interchange fee on debit cards (when swiped a-la-Square Reader) at 0.05%+$0.21 per transaction. That means 2.75% is 98% profit for Square on a big debit card swipe.<p><a href="https:&#x2F;&#x2F;usa.visa.com&#x2F;dam&#x2F;VCOM&#x2F;download&#x2F;merchants&#x2F;Visa-USA-Interchange-Reimbursement-Fees-2015-April-18.pdf" rel="nofollow">https:&#x2F;&#x2F;usa.visa.com&#x2F;dam&#x2F;VCOM&#x2F;download&#x2F;merchants&#x2F;Visa-USA-In...</a><p>The only place Square&#x27;s subsidizing the transaction fees is on very small purchases where the flat ~$0.15 of the interchange fee amounts to more than 1-2% of the total transaction, and with AmEx where, if Square hasn&#x27;t negotiated better than sticker rate, they could be paying 2.85-3.5% depending on business type.<p>If they&#x27;re losing money on the one thing they charge money for, what&#x27;s the business? And how are their competitors doing it? PayPal&#x27;s historically offered merchants with volume as low as 1.9%. They offer 2.7% flat rate (no per-transaction flat fee either) for their swiper.