You have to have a large number of individuals cooperate (agree not to use credit cards) in order to gain a group benefit (lower prices because the merchant isn

You have to have a large number of individuals cooperate (agree not to use credit cards) in order to gain a group benefit (lower prices because the merchant isn't paying transaction fees). Any one person can defect (use a credit card) to get their cash back, for personal benefit to the detriment of the group. If I was a merchant, I'd solve the problem by passing on the credit card fee to consumers who use the card (or equivalently, offer cash discount, if my marketing department tells me consumers hate surcharges but love bargains).