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In the UK there are two key factors: - Consumers pick the cards. - Retailers are (in general) barred from charging different prices for cash vs card payments.

In the UK there are two key factors: - Consumers pick the cards. - Retailers are (in general) barred from charging different prices for cash vs card payments. Therefore it makes sense for any customer to pick a card with a high reward/cash back scheme (1% back on everything you buy is nice) as you are essentially taking a share of the profit your card issuer is making on each transaction, at the expense of the retailer and cash buyers. The retailer has essentially no power to avoid this, as long as the card issuer's take remains below the point at which it would be unprofitable to service their pool of customers.

chronomex 17y ago
Retailers are (in general) barred from charging different prices for cash vs card payments. As I understand it, here's how it works in the US: - Amex says: "You can charge a card fee if you do for all the cards you accept." - Visa and Mastercard say: "No card fees, but you can offer a discount for cash transactions."
hristov 17y ago
"The retailer has essentially no power to avoid this, as long as the card issuer's take remains below the point at which it would be unprofitable to service their pool of customers." AMEX is really on the brink of this point currently in the US. A lot of places simply do not accept AMEX and a lot of AMEX customers carry different cards because of that. Since merchants know that the average AMEX customer usually carries another card as well they are often ok with not accepting AMEX. Currently the main selling point of AMEX are rich people that swear by their black amex card and are really annoyed when somebody makes them take out their lowly visa. So places that cater to rich people or hope to cater to rich people usually try to take the hit and accept AMEX.