Also, taxes. Card networks issue 1099-K forms in the USA and report earnings to tax agencies.

That's a major reason Argentina is taking steps to mandate acceptance of debit cards - so that income is accurately reported for tax purposes: https://www.bcra.gob.ar/MediosPago/Politica_Pagos-i.asp

In many countries the fees are capped much lower than 3%. In these countries you see the opposite - small shops and restaurants now don't want the expense of dealing with cash, which has to be stored securely, counted, reconciled and banked. All of these things take time and money.

Cash isn't some 'free' panacea for a business.

Transaction fees are much lower in Europe, there are some laws about it. That means that credit card rewards are nowhere near as generous.