In what world is 2-3% of every payment "modest", when actual fraud losses are an order of magnitude below that?
The consumer reaps the benefits, but the 2-3% is charged to the merchant and the consumer gets some of that back as rewards points/cashback/etc.
Of course the business passes its costs right back to the consumer, but it's not visible to them, while the benefits are.
Australia recently capped credit card fees. Yes, it has lead to a decline in credit points/cashback but in the end it's leaving more money in your pocket.
Exactly, but a hidden cost is still a cost.