Nope. Doesn't work that way. Don't get me wrong, I think merchant processing fees are outrageously high, and that merchants should be allowed to add a few percent for payment with credit cards, in order to encourage cash/debit card payment.

Australia limited interchange fees around 2003 (cut them in half), and as would be expected, merchants did not lower prices.

"Interchange fees are paid by the merchant, and there have been studies done in Australia that said that consumers have not saved a penny by lowering interchange rates — that the merchants have not reduced prices at all."