Traditionally the discount for cash in many professions is due to avoiding tax.
i.e. a plumber will do a job for cheaper if they are paid in cash as they won't be declaring that work in their accounts - avoiding the ~20% tax that would be due otherwise.
While true, I know of many small businesses that give cash discounts because the credit card fees ruin the profit margin on small purchases. Sometimes they even lose money on transactions. For instance if you buy a scone for a $1.05, the credit card fees alone might come out to 38ยข for the merchant. This is why you often see "minimum card purchase $5" at coffee shops and small businesses.
Yes, the fee is usually fixed cost plus percentage, which makes small transactions very expensive.
The small transaction problem is vastly worse with Bitcoin, though. The catch is that the transaction fee is paid by the buyer, so that $1.05 scone costs the consumer $8.05.
$1.05 goes to the consumer
$8 transaction fee goes to the miner
Some fraction (eventually most) of that $8 transaction fee goes to the energy company supplying the miners with electricity.
Now your $1.05 scone transaction includes the cost of charging a Tesla battery 3 times over, because that's how much energy went into the transaction on the blockchain.
Absolutely true. I'm not advocating for crypto to replace credit card transactions, as that would be insanely impractical and wasteful. I wanted to draw some attention to how badly merchants are treated when they accept card payments.
i.e. a plumber will do a job for cheaper if they are paid in cash as they won't be declaring that work in their accounts - avoiding the ~20% tax that would be due otherwise.