Mystery solved, Square introduces thinner card reader1
Square has enhanced the ol' swiper, making it more accurate, and the 3.5 inch jack is compatible with more devices. The new reader is available right now from Square's website and it will be at retailers early next year.
If you've never seen Square in action, it is a pretty cool app that works just as advertised. It allows merchants to be totally portable and still accept credit cards. It even allows merchants to capture a signature and send a receipt to the customer via email. Now that the card reader is smaller, there really is no excuse for a merchant on the go not to use Square, especially since the fees it charges are a lot less than the banks.
source: Square via MobileSyrup