Square Inc., Twitter co-found Jack Dorsey’s latest venture, has really taken off lately. Just about six months ago, the company reached a milestone of 1 million users. Today, they reached another milestone and now have over 2 million users.

Annually they are processing $6 billion in mobile payments and are being used by over 20,000 retailers. Square’s biggest threat comes from other payment providers like PayPal and possibly even Apple’s recently introduced Passbook application.

While it is unclear whether the new Apple software brings anything imposing to the table, PayPal is a very real and immediate threat as it is well established, constantly forming new partnerships, and requires no additional equipment to take advantage of.

Most recently, PayPal announced a new project collaborating with TiVo and Comcast cable to work on adding payment options to home television sets. The technology would allow consumers to make charitable donations and pay for products right from the comfort of their living rooms using their remote control.

While there is plenty of room for competition in the mobile payments market, it seems like the giants are making progress fast and the little guys may get overlooked in the commotion. I suspect we’ll be seeing more aggressive action from Square in the very near future.

Take a look at one hour of Square payment activity: