1. Hardware for the softwareMobile devices now have much higher processing power and everyone is carrying a computer in the pocket. Apps for these devices no longer have to be limited to entertainment and enjoyment, and can now do actual work.
Square seized this opportunity and created an app aimed at merchants instead of the standard consumer. Furthermore, they included the card reader which does not cost much. It uses an input port which is available on all devices, the 3.5mm headphone jack. I found the use of sound waves ingenious, as it uses a technology for some purpose which it was not intended for. People who want to use the Square's card reader will have to use their app, and vice versa, if they want to use the app they will have to use the hardware.
2. Simplified UISquare's app has a super simplified and minimalistic design. The buttons are big and purposeful, there is little or no clutter and the app looks incredibly plain. In fact, the app does not draw attention or interest, unlike other apps such as pinterest or instagram, with their flash animations and pictures everywhere. However, I feel that this is appropriate as the app is aimed at merchants. They would most probably want the app to be simple to use, with functions where they expect it to be. The app was made with functionality in mind and it really works.
3. Fast and easy
If you want to do something, somebody else has already done it. People are also impatient and want to push their ideas and creations as quickly as possible. Square is able to provide the users with the service four times as fast as traditional banks or service providers. People who are impatient or require the service fast would be attracted to square instead of bigger providers. Smaller and independent merchants would also be less intimidated to try something like square in their company, rather than going for a full fledged point of sales system.
I think that Square would have to expand their company if they were to survive. The whole company is focused on one particular hardware and companion app. Competitors would very quickly catch onto this. Furthermore, larger companies and banks would have a much larger user base. All they need to do is to create a good app and their users can be migrated.