According to media reports, merchants like coffee shops, newsstands, vending machine deployers and others have started trying to find ways to get consumers to pay with cash rather than debit cards after card processors eliminated the interchange discounts they had offered on transactions of less than $10.
The loss of the discounts has meant that interchange on transactions of below $10 has sometimes jumped from 2-3% to almost 21%, which is the regulatory-mandated debit interchange cap. This has led to merchants offering discounts for consumers who pay in cash or, in some cases, deciding to only take cash.
Should the trend continue, it will represent the most recent and obvious reversal of a tendency to move payments steadily further away from cash and onto cards.
In the past five years, the ability to pay by debit card has appeared in the quick-service (fast food) industry, the taxi industry, and in vending machine sales.