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Here in New Zealand, retailers will often charge a few percent extra for credit card purchases, and a lot of smaller shops won't accept them at all. EFTPOS (basically like a debit card in the states) seems to be much more commonly used, often with contactless terminals.

It seems to work well - I do have a rewards credit card, but certainly couldn't get by with just that card.

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In New Zealand, EFTPOS costs the retailer a fraction of what credit card transactions do. When you swipe/insert your debit card, it goes through the EFTPOS system. But when you use the same card contactlessly, payment is processed by the credit card company and the retailer is charged a credit card fee or similar. That's the reason many retailers don't accept contactless payment.

The banks and card companies would surely love for EFTPOS to die, but the retailers love it. There's a reason every card issued today supports contactless payment, and you can't opt out.

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