Every time I use my credit card, the business has to pay a 3% fee on the total purchase to the credit card company.
The only reason I use my credit card is because I get 1% cash back through my dividends credit card. So, what if I was given a different incentive? Let's say my local Chinese restaurant offers me a 1.5% discount on my purchase if I use my debit card?
I still don't have to carry cash, which I hate. He cuts his transaction costs in half (with a debit card, the retailer usually pays a nominal $0.10 fee per transaction). And I get 50% more cash back on every purchase.