I'm sure for the city tap to pay is cheaper for them than collecting the $, even without a fee.
The main purpose for taking cash is tax evasion, which outweighs the increased cost of cash handling.
Be careful what you ask for. A common ploy for dominating marketplaces (Amazon, Doordash, etc) is to prohibit merchants from offering lower direct prices than what's offered on their platforms. They always say this is to guarantee that you'll get the best prices with them. But that's a twisted way of saying all prices must be at least as high as theirs, and the point, of course, is to remove any incentive for merchants not to use the middleman.
Assuming there’s a data-sharing agreement between the city and the app, it also allows for faster targeted fine enforcement.
This isn’t something city governments should do to its citizens.
In an ideal world (well, my ideal world), these fees would be called out so that you, the customer, could choose not to pay them. You might see, "if I pay cash this $100 product will cost $100 but if pay with my platinum card it's $105. I can save $5 by paying cash".
Mastercard and Visa forbid this for two reasons: (1) they don't want you choose the cheaper cash option (2) they don't want a competitor to be able to offer a lower fee. In the example above, they charge $5 but a competitor could charge $1. You'd might pick the cheaper option but you're unaware of it since they forbid the merchant from offering.
They can only do this because they effectively have a duopoly on the market. Don't play by their rules, lose 99% of your customers. Various governments try to fix this. The cynical reason it hasn't been fixes is they pay off politicians to make sure it doesn't get fixed.
The govt both sides really want the economy here to eventually move to electronic so it can be tracked hard - however it was obvious the banks along with the $$$$$ credit card companies were making making a killing even at 2.5 % of all retail purchases ... so it was better to encourage merchants adopting close to free services like eftpos again which is about 0.2% max of a transaction.
Caveat - Of course some big retail stores can negotiate down the transactional percentage they pay in fee to Visa, Mastercard or Amex ... though I don't think any here got anywhere near as good a deal as Stripe. [1]
[1] https://stripe.com/au/resources/more/eftpos-fees-and-charges...
> where Visa and Mastercard debit is about 0.5%, and many credit cards are an average of 0.9% or more.
Sounds pretty illegal https://en.wikipedia.org/wiki/Robinson-Patman_Act so I guess somebody should start pressing charges against a lot of companies.
Nothing inherently wrong with a booking fee if it is transparent.
Booking fees are unethical and should be included in the price