When you tender a $50 note to pay a $50 fruit and veggie bill, you pay $50, the seller gets $50 cash. He then spends that on $50 worth of items. Simple, clean and fair.
If instead you pay it by card, the merchant pays a fee to the banks. The amount of the fee varies from merchant to merchant. I have used 1.5% in this example. So you pay your $50 bill by card. It still only costs you $50 but the merchant has received only $49.25 after the bank deduct their fee.
Starting amount: $50.00
Credit Card Fee: 1.5%
Transaction No. Balance Available After Fee
1 $49.25
2 $48.51
3 $47.78
4 $47.07
5 $46.36
6 $45.67
7 $44.98
8 $44.31
9 $43.64
10 $42.99
11 $42.34
12 $41.71
13 $41.08
14 $40.46
15 $39.86
16 $39.26
17 $38.67
18 $38.09
19 $37.52
20 $36.96
21 $36.40
22 $35.86
23 $35.32
24 $34.79
25 $34.27
26 $33.75
27 $33.25
28 $32.75
29 $32.26
30 $31.77
31 $31.30
32 $30.83
33 $30.36
34 $29.91
35 $29.46
36 $29.02
37 $28.58
38 $28.15
39 $27.73
40 $27.32
41 $26.91
42 $26.50
43 $26.11
44 $25.71
45 $25.33
46 $24.95
Do that for a month and a half and you can readily see how fast money evaporates out of your and my pockets and transfers magically to the banks. At a transaction a day, as you can see from the above figures, in a month and a half the banks have over half what started as a $50 note.
Remember, on the surface this is invisible to the consumer as it is the merchant who pays the credit card fee. Of course the merchant has to build into the cost of his product the cost of the bank fee so you, the consumer, ends up paying for it.
So unless you are comfortable with the banks owning half of everything in less than two months, keep using cash!