I've seen this said a lot, but in my experience whenever a merchant has different prices for cash and credit card, the cash price is always lower. So whatever the merchant is paying to Visa and/or MasterCard, it's more than it costs to handle cash.
i.e. a plumber will do a job for cheaper if they are paid in cash as they won't be declaring that work in their accounts - avoiding the ~20% tax that would be due otherwise.
The small transaction problem is vastly worse with Bitcoin, though. The catch is that the transaction fee is paid by the buyer, so that $1.05 scone costs the consumer $8.05.
$1.05 goes to the consumer $8 transaction fee goes to the miner Some fraction (eventually most) of that $8 transaction fee goes to the energy company supplying the miners with electricity.
Now your $1.05 scone transaction includes the cost of charging a Tesla battery 3 times over, because that's how much energy went into the transaction on the blockchain.