The credit-card company's agreements bar merchants from offering those sort of discounts: http://www.datawedge.com/news/newsletters/june07.htm http://www.dataw

The credit-card company's agreements bar merchants from offering those sort of discounts: http://www.datawedge.com/news/newsletters/june07.htm http://www.datawedge.com/news/newsletters/june07.htm This is why government action seems reasonable in this case. You can make the argument that we shouldn't have ended up with an effective duopoly, that regulation should be lighter to allow more competition that would drive out this sort of 'rent-seeking' behavior, and I'd be sympathetic. Unfortunately I don't think that sort of wider overhaul is politically possible, and even patching up the existing regulations with yet more seems better than doing nothing.