I can't read the article, because the Bloomberg site, in its infinite wisdom, shows me the mobile homepage. By the headline alone, it sounds like bad news for Square.
Maybe I'm missing something, but, why couldn't Square do something like this on their own already?
The NFC lets people with iphones make payments. Square's dongle lets people take payments. Square could make a new dongle that receives NFC signals and runs it thru the payment processing backend to let people take payments with their phones, the way they do for credit cards.
If Apple wants wide adoption, they will have to make payment taking an open opportunity, because there are so many different situations where people take credit cards now. So Square could plug into that, and would be competing with Apple to provide payment reception hardware and sofware to retailers-- which is the kind of competition Apple really likes, because Apple is in the platform business, rather than the "selling low volume terminals to retailers" business. So, I think Square will be able to plug into Apple's platform, just as they plug into Visa's platform now.