Most of those losses are because Square subsidizes the actual cost of credit card processing (i.e. charges stores less than what Visa charges). There are a bunch of ways to mitigate this:<p>- the termination of the Starbucks agreement in 2016 (this already saves $27 million&#x2F;year based on the 2014 numbers)<p>- raising flat-rate processing fees for businesses in the future<p>- reduce the cost of transactions by adding more fraud-prevention measures that make credit card processors happy (e.g. Chip and PIN)<p>- create a new business that allows Square to cut out the credit card networks by owning both sides of the transaction<p>- create a new business using the information from being in the credit card processing flow that is profitable enough to subsidize the credit card processing<p>Right now, I suspect they&#x27;re trying to &quot;pull an Amazon&quot; -- they&#x27;re operating at a loss, but they hope investors will like the brand and the vision enough that they&#x27;ll put money in anyway.