Apple explains it a bit more on its site:
Square is a revolutionary service that allows you to accept credit cards, using a reader that plugs into your iPod touch (4th generation),If you find yourself conducting a lot of sales through Craigslist or similar services, and often deal with cash transactions and you think you can benefit from , or iPad along with a free easy-to-use app. There’s no need for complicated contracts, monthly fees, or merchant accounts. All you pay is 2.75% per transaction. You can download the free app from the App Store. Square is currently available for use in the U.S.credit card payments, Square might be worth a look. Also, if you own a small business and find that the charges for a credit card payment system are a little high, or that the variances amongst certain providers seems outrageous, Square charges a flat rate across all transactions.
It’s available via Apple’s online retail store, and will soon be sold in its brick-and-mortar stores, too.