Pretty sure Apple and Square have a special agreement in place. At a talk I went to by Jack Dorsey he said they met with Apple before launching Square.
Although the immediate parent is being downvoted, it's actually interesting to understand why Apple have allowed this without collecting a % of the transaction fees that Square receives.
Or perhaps they are collecting a (lower?) percentage.
From what I understand In-app purchases (where Apple gets a 30% cut) are only required when the item is only for use from within the app (virtual currency, level packs, digital subscription etc). Purchasing a physical items does not require transaction to use Apple's IAP API. In fact, it is expressly forbidden.
edit: Or, at the very least, entitled to 30% of the fees charged by Square to the merchant?