The incentive for merchants to accept cards for payment is that it'll increase number of sales. And it does. In principle this should even out over all sales.. but cards do make it easier for consumers do purchase stuff, and I'm absolutely sure that I personally spend money way easier with a card than without (not that I spend more than I make, mind). The total number of sales go up.

I haven't used cash in my home country for the last two decades, at least. I mean, CC works even on parking meters when paying half a dollar (equivalent) for a few minutes of parking, and I can use a card in flea markets and even some garage sales.

Oh, I forgot: A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc). That's because handling cash costs them MORE than handling credit/debit cards. In other words: It appears that using cards LOWER the costs for the merchant, not the other way around.

EditAdd: I presume a lot of the cost saving is that paying by card is 100% electronic, just tap the card (add the pin code if it's expensive enough), and the transaction goes directly into the shop's account. With cash it's way more cumbersome. Way, way more.

(Mind, there's no such thing as signing by hand anymore. If there were paperworks involved it would be different. But there aren't any, not in Europe and not in Japan anymore either)

One thing to consider: cards solve the issue of employees stealing, which is surprisingly common from what I’ve heard especially in businesses with high workers turnover, such as seasonal bars and restaurants.

They also solve the problem of someone coming into the store with a gun and robbing the place for the cash in the register. And for the government, they solve the problem of stores not paying sales tax.

> A lot of shops, restaurants, and other establishments have stopped accepting cash, even if it's illegal to do so (legal tender etc).

No. This is a misunderstanding of legal tender.

https://www.federalreserve.gov/faqs/currency_12772.htm

"There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law that says otherwise."

Legal tender only applies to debts. When you go to buy a t-shirt at Target or a burger at McDonalds, you don't owe a debt, and they aren't a creditor.

> egal tender only applies to debts.

I used to think that was true, but try paying parking fines, etc. with pennies. Legal tender has never been challenged in court to my knowledge

Parking fines aren't debts, and thus, legal tender doesn't apply.

https://www.findlaw.com/legalblogs/seventh-circuit/city-sanc...

> The Seventh Circuit Court of Appeals ruled this week that city-levied fines are not debts under the FDCPA... District courts, for what it's worth, uniformly agree that a fine does not stem from a consensual transaction, and thus is not a debt under the FDCPA.

> a fine does not stem from a consensual transaction, and thus is not a debt under the FDCPA.

Which transactions with the government is "consensual" where it doesn't demand payment up front (like a contractor)?

This goes back to my idea that while legal tender is a nice idea, in practice it means nothing

> Legal tender has never been challenged in court to my knowledge

It was challenged and upheld, both as against debts before the the legal tender acts were passed and those after, by the Supreme Court in Knox v. Lee (1871).

Yet the US government can refuse payments in cash

https://www.federalregister.gov/documents/2017/10/03/2017-21...

Yes. Because a patent filing fee is not a debt.

(And because government can exempt itself from virtually anything not forbidden by the Constitution. This is why cops can break down your door, but I can't.)

In the UK the definition of legal tender includes a limit on the use of small denominations.

As I wrote elsewhere: You're seeing this from inside the USA. USA is not the world. What's translated as "Legal tender" when wanting to write in English is just the closest term. That doesn't mean that your local definition of legal tender then applies. Cash, to be specific, must be accepted as payment (with certain limited) exceptions, in my country. And still some places will refuse it. They even accept paying fines now and then because of it.

> The incentive for merchants to accept cards for payment is that it'll increase number of sales this is something that ive thought about a lot, because while it is strictly true in the short run it may not be in the long run. For example, i don't have any debt, but i use a credit card for everything. Why? It's become my default to use it.

I wonder if the same thing will happen with BNPL (Klarna, Afterpay). These are higher fee than credit cards (5-7%) because they bring in new customers. But, like with credit cards, savvy customers are starting to see BNPL as interest free loans (aka free money on the float, even better than credit card rewards), and it's possible that they become the new consumer results. Merchants are left holding the bag of paying 6% processing fees for everyone, even people who can afford it.

> I think it's close to impossible to "fix" Visa without government intervention (e.g. limit fees to a fraction of a percent), but I'm still grateful to anyone who tries.

This is what Australia is looking at currently: https://www.abc.net.au/news/2025-07-15/rba-credit-debit-merc...

I'm interested to see if that works out, and curious what it means for international cards with lots of perks. I imagine, for example, it wouldn't change anything right away for a Chase Sapphire card issued in the US, but if more countries followed suit there would eventually be a tipping point and card benefits would be reduced.

I guess the issuers all have complex models that take these things into account. In any case, I think it's a good move.

The price is the same if you use cash or card. Really, after reward points, card tends to be even cheaper.

Visa/Mastercard/BNPL/Klarna etc. all have negotiated discounts for consumers, paid for by the merchant.

I'm skeptical that merchants would lower prices (stepping away from $x.98, etc) instead of pocketing the higher margins themselves.

You're right that once prices have gone up, they rarely come back down. But if the price is the same, when you pay cash you're effectively subsidizing credit card reward programs, and lining Visa/Mastercard/issuer pockets.

Same can be said about health insurance: private insurance negotiate lower prices than the non-insured due to collective bargaining.

if all customers choose to us cash the merchant could lower price with 3%. If you are the only one paying cash then yes the price will stay the same.

Why would the merchant lower the price by 3% if consumers are willing to pay the current price?