No, the merchant pays, although recently more and more have been handing off the 3% to the consumer by giving a lower cash price. But well, most people don't have cash so that's essentially a convenience fee.

Most of the time it’s the other way around, at least in the US: because cash and credit card prices are almost always the same it is the cash users who are overpaying, to the tune of 2-3% of the purchase price. It makes no sense to use cash.

as opposed to what, though? You don't get a 3% discount for using cash.

No? There's zero % interest for every purchase if you pay for it fully the next billing cycle