Good? I hate the asinine secondary market of "points". Just don't take the money in the first place and then we don't have to sort out how I can reclaim it somehow.
Consider a front desk at a hotel. Thousands of dollars a day in transactions occur via card, which would warrant frequent drops into an expensive safe if they happened with cash. With cards they pretty much only hold a trivial amount to deal with sundries that isn't worth protecting beyond a simple envelope to a back-office.
Credit cards dominate many industries in the US to a point where cash management is now trivial because the daily amounts aren't worth any employee losing their job over or a criminal risking robbery punishment for.
A business that has any type of daily cash accounting is still going to need to balance the register at the end of the day, reestablish change to open with, have arrangements for transport, &c. Bad employees can still pocket a tenner on occasion.
Sure, some smaller places with barely any cash probably just lock the drawer and call it a night.
I can't find the figures now, but estimates of cost of cash handling is far far lower than the 2-3% of swipe fees.
Many hotels have neither of these.
To the original point, if I am staying in the hotel and I go to the bar I would just sign to the room and not pay cash.
The interchange fees charged to merchants roughly covers rewards. It's why Visa et al charge higher fees to merchants for processing higher-tier rewards cards. Interchange fees don't cover all the other overhead of running a credit card system, but they do cover rewards.
eg, free consumer checking accounts have been heavily subsidized by interchange fees for years.
There are more dollars in interchange fees collected in the US every year than there are dollars of fraudulent transactions.
The latest fad in Canada seems to be Paytm, which lets you pay (among various bills), your property taxes with your credit card.
The 5% was eventually capped and the card no longer exists.
Competition will lead to that. It doesn't happen immediately, it happens in waves. These are called price wars. When that happens, they try to undercut competition at every possible turn, and having lower payment processing fees allows them to go lower. Who wins a price war? The consumer.
Yes: points are ridiculous. The fact that credit card fees are passed on to cash payers is ridiculous. Visa and Mastercard are absolutely minted. Where does that money come from? You and I.
(and: why does competition not work for Visa and Mastercard as well as it does for retailers? Because the feedback loop is much longer. Intractable, in practice. Choosing one retailer or the other is a clear signal we can send. But are we going to choose merchants based on payment processor support? As for merchants, they're stuck in an oligopoly. Competition is gone, leading to this unhealthy market.)
They are probably illegal (or against contracts) in most states, but you see them very often.
Minimum purchase requirements for credit cards were explicitly legalized in the US in 2010 as part of Dodd-Frank. Merchant agreements are not legally allowed to prohibit them.
"2010 law: up to $10 minimum OK. The law says that merchants can set a credit card minimum purchase of up to $10, as long as they treat all cards the same. It also allows the Federal Reserve to review and increase the minimum payment amount."