Most, yes, but with plenty left over. They charge this for all transactions, whereas the wholesale/processing rate depends on the type of card. Pin debit transactions clear interchange well under 1%. Visa and mastercard have a few different tiers. There's not much margin in an American Express transaction at that rate, but your average VISA/Mastercard wholesale costs will net out to ~1.5%, depending on the kind of merchant you are and what kinds of cards your customers tend to use. (It's more expensive to process a reward card like the Chase Sapphire Reserve than your local credit union's visa card.) Square covers lots of different merchants, with special prominence in low denomination restaurants / cafes. At scale, that's pretty lucrative.