[danpalmer]

> picking up customers who don't understand merchant processing and are willing to pay an extra 1% or so to avoid ever thinking about it

I don't think that's particularly fair to Square, for three reasons:

- For much smaller merchants, it can be cheaper overall than traditional payment processing, as you don't have to buy expensive hardware.

- Not having to "think about it" is probably underrated, the cost structure of traditional payment processing is very complex and can make it more difficult to know how you need to mark up your products to maintain a target margin, whereas with Square you're guaranteed a flat rate which will make a lot of other decisions easier.

- They provide a lot of other services for small businesses, like point-of-sale (I think the software is free for that? Big saving for small merchants) and payroll software (again a time/cost saving).

I think it's entirely reasonable that a thinking person might decide to pay 1% for these things, rather than because they don't know any better.