Not sure if this is different in Europe (check before saying it’s different, many people in the US aren’t aware of this either) but in the US at least all credit card transactions (and possibly debit too?) incur like a 3% fee. You’re paying that fee (either directly or through it being built into the price of goods) no matter what. The reason to use a card with a good rewards program is so that you actually get something in return for that small fee. So there is a sense in which you need to play the rewards game, otherwise you’re just paying more for goods for no reason.
It’s a bit more insidious than that in that in a lot of stores and restaurants in America owners just bake that fee into the price instead of explicitly passing it onto the consumer and giving them the choice on whether they want to pay it. So if you use a debit card in the states you are usually actually subsidizing everyone else’s 3% fees (there are in fact places that explicitly charge the 3% fee to credit card users but they are rarer in comparison)
That fee is massive business for Visa etc. There was a pretty big battle between Walmart and the credit card companies a few years ago because Walmart started defaulting to “debit” as the option when you stuck a debit card into their machines (debit cards can be run as either debit or credit) in order to save money. Which of course removed that money directly from the pockets of the payment processors.
a lot of stores and restaurants in America owners just bake that fee into the price instead of explicitly passing it onto the consumer
Not really. Most businesses don't set prices based on "cost plus" methodology. Maximizing profit based on price and volume is how most do it. Some merchants may choose to absorb the 3%, to compete on price and maximize profit through higher volume than a competitor who charges the same price but doesn't accept credit cards.
You "always pay the 3% fee" the same way you "always pay" for anything else the merchant may offer but you don't use: curbside pick-up, free delivery, the "free gift with purchase" you don't accept because you don't need it, generous returns policy, etc, etc.
For a long time the merchant agreement for accepting credit cards required that you not charge a different price so merchants where forced to bake the price in.
Though the costs of cash and checks is probably more than the 3% fee on a credit card. Cash needs to be counted twice at the register, then change made which again is counted twice (at least, sometimes a 3rd time if the numbers are not the same!), then at the end of the day the manager needs to count it all twice again, and even then mistakes are made. On top of that is often stolen: by robbery, dishonest clerks, management fraud, and owner fraud (owners are defrauding the IRS, while management implies someone not the owner who is trusted to count the cash). Checks need to be counted as well, and they can bounce thus being worth very little (they are sold to collections - see article for hints to how that works). Credit cards by contrast are run electronically and so know instantly you are paid you don't have the overhead of adding up the numbers. (debit cards with the lower fees are still subsidizing the others)
Interchange fees are a feature of all major card platforms (Visa, Mastercard, Amex, etc), however the fees have been regulated and limited in Europe, with credit card interchange fee being capped at 0.3% and the total merchant cost for cards generally being <1%. But, of course, that also means that there really isn't free money for any meaningful "rewards game" for EU cards.
