Square's strongest pitch has always been its emphasis on user experience. From its elegant, dead-simple card reader to receipts sent via SMS, design thinking has clearly informed Square's approach to rethinking how we pay for stuff from the outset.

A point less obvious to those of us on the consumer side, however, is how intently Square has focused on the user experience of merchants themselves. Not that this should come as a surprise�these are their actual customers. (I'm dense like that.) But apparently I'm not the only one. How else to explain that Jack Dorsey, a guy whose other claim to fame is microblogging, was able to so powerfully improve on a technology the incumbents had decades to advance but didn't?

That focus cropped up again this week as Square announced a new flat-fee option for small businesses. A key Square selling point has always been the simplicity of its pricing: 2.75 percent per transaction. No weird fee schedules that depend on the size, time or frequency of transactions. Just 2.75 percent. Boom, done. Now merchants that do $250,000 or less in sales per year can opt to pay Square $275 per month for any number of transactions. Even simpler.

But there's something about the simplicity of Square that seems almost too magical. The design fan in me wants to believe it's just someone finally shaking up the stodgiest of businesses – credit cards – with a little user-centered thinking. But the reporter in me wonders, what's the catch? The closest thing to a too-good-to-be-true hypothetical scenario I've come across so far is that legacy companies haven't followed Square's simple-pricing lead because no one can make money that way.

Doing some back-of-the-envelope math, *Business Insider'*s Owen Thomas finds that Square will still turn a profit on flat fees if merchants do $180,000 or less in transactions per year, with an average transaction of $75.

That average transaction figure comes from Square itself, an amount that seems high to Thomas and me both. It seems impossible, at least, that such a high average could still hold once Square starts processing payments from 7,000 Starbucks. Which leads to another interesting question raised by a Dutch startup called Cardis International, which after the Starbucks deal was announced started floating the claim that based on its 2.75 percent flat rate, Square couldn't possibly be making money on transactions of $10 or less – in other words, most transactions at Starbucks. Cardis claims that based on credit card companies' published "interchange" rates – the fee they charge per transaction – plus Cardis' estimate of Square's own processing costs, Square would barely break even off its 27.5 cents cut of a $10 purchase, and would easily slide into the red on an average latte.

Cardis' argument has several potential problems. First, we don't know what kind of deal Square struck with Starbucks. But it's hard to believe that, even though the partnership represents a marketing coup for the startup, Square would sign an agreement they knew was a money-loser. Cardis also has a clear self-interest in advancing their argument: They make a product that bundles smaller credit card transactions into a single larger transaction before sending it through to be processed, which would drastically cut down on per-transaction fees. They'd like nothing better than to help Square save some money, assuming their math holds true. But for all we know, Square already bundles small transactions on the backend itself, or has some kind of deal to incur lower fees itself, though Cardis points out someone along the chain would eventually have to pick up the cost.

At this point, the fun of watching Square is to see if its man-on-a-wire act works. Can simplicity and apparent transparency really succeed? Can better design really win out over purposely obtuse systems where confusion is baked into the business model? That's the vision Square likes to present to the world. We'll be watching – lattes in hand – to see if they've really got it all figured out.