I know 4 friends with business that use Square now.
The only thing they have of worth is the customer base who already is using iPads, iPhones and iPod touches to interface with the product.
I can't imagine they have any technology Apple could not replicate. Its a credit card reader with syncing. Its piggy backs off the iPhones wireless for christ sake.
If Apple made a better product, they just might switch if the hardware costs to dont set them back.