Can Square make money with its new pricing?

I doubt that Square is too worried about whether they can make money today with their pricing. Their #1 goal has to be to get big enough, quickly enough that they can fight off the inevitable competition from other payment gateways, and also to reach the scale where they can negotiate better deals for themselves.<p>If they don't price aggressively now, then lack of profitability today will be the least of their problems.

Sure they can. Their cash flow model differs from other merchant service processors. Square holds potentially thousands of dollars for 30 days before delivery to the account holder. Every moment of that time they're earning interest. It's called playing the float, and some players in the space make most of their money on float interest.