Their iPad app is a bit more comparable, but you'd really be pushing it to say that their iPod/iPhone app can replace a point-of-sale system.

Square is perfect for mobile business like landscapers, plumbers, artists, etc. But for businesses with a brick & mortar location, they're missing a lot of the things so they won't be replacing pos system as is.

Some of the standard point-of-sale features that Square is missing I don't ever see them getting in to. Things like cash management, re-ordering inventory, employee time clocks... that's what store owners are looking for in a pos system.

The iPad app is OK for more simple businesses, which is why they always show it in a coffee shop and not a retail store. If they offered a payments API I think they would be able to break into this market not by replacing the POS, but by replacing the credit card terminal.