The dumb thing is they have the tech to do it - when they rolled out their new chip readers several years ago, I was in a store where they had accidentally left the contactless reader on for a day or two, and was able to use ApplePay.

Next time I went back the reader just feigned ignorance.

Wormhole attack? Not sure if this is still a possibility though as distance base timeouts could be employed.

https://arxiv.org/pdf/1904.10623.pdf

Contactless is not more expensive per transaction.

Initially only “credit” networks like Visa/MC supported tap to pay with interchange fees of 1 to 2.5%. The low fee debit networks did not. Regulated debit is as cheap as 21c + 0.05%. A lot of retailers have thin profit margins of 5%. So contactless adoption would mean more high interchange “credit” transactions and fewer low interchange debit transactions. Thus the retailer resistance to contactless.