Square will obviously have to grow more, but the reason I think they have a future is they're getting merchants who didn't take cards to take them, easily and cheaply. My family is not on the coast and there's still a lot of places that don't take cards for whom square should be a really good solution. Then they can do the classic microsoft strategy: start with the smallest/cheapest and relentlessly move upmarket. Will they ever be the solution for Safeway with hundreds of stores and a very complex discounting system? Probably not. But there's a lot of smaller businesses. Small to medium restaurants should be a key target customer.