It's not just Starbucks. He did those calculations based on the interchange fees Square pays to Visa/MasterCard/AmEx compared to the flat 2.75% it charges merchants.

To swipe a debit card, Square has to pay at least $0.21 + 0.05% per transaction. 2.75% of any amount less than $7.75 doesn't cover the $0.21 fixed cost. They lose money.

Same deal with credit except it's $0.10+ (and 1-3.5%) instead, so they're only losing money on every swipe under $4.

There's also some amount of markup over interchange going to their underwriting banks (JP Morgan Chase and Wells Fargo) which makes the minimum charges at which there's any profit even a bit higher than that.

Basically, coffee shops are loss leaders for Square.

Not always. There is a minimum ticket price that must be met for Square to make money. Square charges merchants a fixed percentage, but Square's costs aren't so simple. There is a reason why tiny corner stores charge extra to process a credit card transaction under $10. or so.