Won't the vendors just design their prices in a way that it's economically feasible for them - they just include the transaction costs in the price?

yes, but they're not allowed to charge different prices depending on payment method. so they may factor those costs in - but everyone pays them. doesn't matter if they're paying cash or visa. so as a consumer I don't care about taler's lower transaction costs because I still have to pay the full price. so why should I switch? I'm happy with my visa on my apple watch.

the vendor factors them in the final price, especially if you're buying something below 10 euros

not to mention online micropayments such as donations which could allow people to just send 1 dollar without fear of fees taking up most of it

Especially while having to pay 19-25% VAT on most purchases...