> If you think 3% is too much, there are plenty of other payment processors...

The things is, there's really not.

There's two: Visa and Mastercard.

In the US there's also American Express and Discover (afaik), but those aren't accepted everywhere (to the point that it was a joke in Futurama).

But We’ve actually seen this happen in the United States before. The Durbin Amendment put a cap on debit card transactions of 21 cents plus 0.05% (although an additional 1¢ can be added to the cap if certain security requirements are met). After this Amendment was put into practice we saw two things:

1) Rewards earning debit cards were almost entirely phased out.

2) Prices did not drop as a result.

The reason the EU even capped payment processing fee's was because of this duopoly that was strangling the market. Quite poignant.

And it's 0.2% on debit cards. :)