This is very true. The merchant fees in the UK and therefore the minimum spend between merchants can vary enormously.
For instance, I can buy milk at £0.49 on an American Express card in Tesco, but in my local pub, anything under £10 (on any card other than AmEx - AmEx is still not accepted in that many places in the UK) requires me to pay a £1 transaction fee.
There is no reason behind this, other than Tesco are so huge, they can negotiate a much better rate than a small business, who clearly can't even consider the huge American Express merchant fees.
The sooner somebody disrupts this 'business', the better for everyone.
There is a reason behind this. Tesco deems it worthwhile to take a (smaller) hit to keep your business, whereas your local pub believes you aren't going to switch pubs, and just wants to encourage you to use cash so that they keep as much of the price of your drinks as possible (i say this because £1 in 10 is a 'penalty' more than covering costs.. which should be closer to 30p).
IE, your choice of supermarket is more elastic than your choice of pub.
Bitcoin seems to be the closest thing we have to disrupting this, but the chicken and egg problem isn't going anywhere.
Processing card transactions takes longer and reduces the serve rate of drinks. This is IMO probably a larger factor than the processing cost - cash has a processing cost too (staff time, security, fraud, bank charges) and it seems pretty close to the card processing cost.
I've heard several small shop owners say they prefer debit cards to cash since they claim it reduces the risk of robbery. The more people pay by card, the less cash there is in the till and thus the less reason to try to rob a place.
For instance, I can buy milk at £0.49 on an American Express card in Tesco, but in my local pub, anything under £10 (on any card other than AmEx - AmEx is still not accepted in that many places in the UK) requires me to pay a £1 transaction fee.
There is no reason behind this, other than Tesco are so huge, they can negotiate a much better rate than a small business, who clearly can't even consider the huge American Express merchant fees.
The sooner somebody disrupts this 'business', the better for everyone.