In the EU, the opposite of this happened: the EU directive PSD2 made it illegal for merchants to apply surcharges on purchases using consumer credit and debit cards from early 2018.
I thought this was a UK govt being stupid thing. So it was the EU to blame!
Given what this article says, it sounds as though not only are cash buyers cross-subsidising card buyers, but non-rewards card buyers are cross subsidising rewards card buyers.
I'm told cash is actually more troublesome for merchants than electronic means, especially as more transactions become cashless. They have to pay for keeping change, physical security, transport of takings, bank cash processing fees, etc. Given the EU/UK caps electronic interchange fees to something reasonable, it may even be card buyers are cross-subsidizing cash buyers in some businesses.
