It seems unlikely that they'll be able to transfer money for free indefinitely. Their competitors hold on to balances for a reason: it's the only way to build a sustainable business on top of free money transfers.
Square Cash recently introduced the ability to send money w/ your credit card (before it was just debit). Square takes 3% of those transactions. Also, I think they charge 1.9% for non-personal use when sending money w/ a debit card.
Square Cash uses the refund rails, no? And aren't those actually free (albeit an exploit of the transfer system)?