Square is a payment processor, and does not wear the merchant hat. Even if it sells the data, the merchants acquiring the data still needs to pay, bumping up the cost of business.

On the other hand, Amazon is _both_ payment processor and merchant. First it gets transaction fees (due to its volume, I guess it is paying around 1-2% for card transactions) from merchants, not a lot, but I doubt it really cares or plans to earn money from transactions. Second it gets sales analytics, and third, it can adjust its online strategies to match the trends it sees in this data. I would say #2 and #3 would be the whole point of launching this.

Square is not the biggest competition to retailers anywhere, and Amazon has a history of using the sales data of their "partners" (on Amazon.com) to compete with them.