There’s a fundamental difference in these categories: product costs apply equally to every customer: you’re all buying the same thing. But transaction costs are not constant; one customer pays with cash and has a 0% cost; another pays with one type of card with a cost of 0.8% + n cents; still another has a fancy rewards card that costs 3% + n cents.

If you charge them all the same, those paying by cheaper methods are subsidising those that pay with more expensive methods.

The credit card companies want people that pay with cash to subsidise them, so that people will use their cards because of how convenient they are. It’s that simple.

It seems to me fairly obvious that it is a bad idea to allow them to require that, and various jurisdictions have agreed and forbidden them from doing so. Then it’s up to the business to decide whether they will favour convenience at a certain cost to themselves and their cash-paying customers, or if they will keep prices as low as they can for everyone, and charge each customer what they actually cost. Some will decide one way, some the other. In some industries, transaction fees are very substantial, due to things like low volume and low value transactions not giving them scope to get better rates from the banks, or just having very thin margins. If anything, these businesses show that you can successfully pass card fees along to customers.

(People often dislike credit card surcharges saying “I want to know what you’re going to charge me ahead of time”—the same sort of reasoning that leads to “free shipping” which is in fact just the same type of subsidy, where locals that pick up or are cheaper to deliver to subsidise those further away. The US clearly doesn’t care about knowing what you’ll be charged anyway, since prices typically exclude sales tax and sales tax is extremely convoluted, so that the sticker gives you only a hint as to what the price may be. Tipping is another related evil. There is, however, a counterargument to my point here: sometimes subsidy is necessary for equity, as when postal services charge flat rates without taking their actual costs into account, so that people in rural areas are not penalised. This whole argument is about the difference between equality and equity.)

The thing I really hate is rewards card schemes, which seem to be a big thing in the US (Australia has them, but not so much and not with such large rewards). Those things are a textbook tragedy of the commons, and the whole system should be illegal, because it’s a blatant scam, charging high card fees so that you can give some of the extra back to your customer: it’s outright theft of commonly 1–2% of transaction value in the US, and making everyone that’s not using one of subsidise those that are… unless card fees are extra.

But all this has still been talking about amounts under 5%. Apple’s talking about not 0.5–5%, but 30%. Suppose company A has a product that they wish to receive $98 for, and they sell it on two platforms with an equal share of transactions: but while users of platform B pay a 2% transaction fee, users of platform C pay a 30% transaction fee. One pricing model you could adopt would be to have transaction fees extra: one platform’s users pay $100, the other $140. This lets each pay the cost. But if you can’t pass the transaction fee on, you’ll be charging users of both platforms $120, and each user of platform B is now directly subsidising each user of platform C by $20. Platform B users are unlikely to be happy to hear this. Platform C is now effectively collecting large sums of money from people that don’t even use their platform.

(In practice, you may wish to bundle the cost of the cheapest common transaction fee for simplicity, providing a baseline cost; this would be 0% for cash, and 2% over these hypothetical platforms B and C, which would lead to you perhaps charging “$100” (rather than “$98 + $2 transaction fee”) and “$100 + $40 platform C tax”, and pocketing $98 in each case.)