Why is it that, at some gas stations, it’s cheaper to pay with cash instead a credit card?

Question

Have noticed this recently at a few gas stations in my area – it will be several cents per gallon cheaper to pay for gas with cash rather than a credit card. Why is that?

In: 23

Answer 1

Besides charging interest on late payments, cash advances, etc., credit card companies / networks make money by charging the store/merchant a fee (usually a mix of a % and a fixed fee, something like 2.5% + 15¢); this is one reason as to why they can offer cash back/miles as rewards. Debit cards also have a fee, but a bit less.

This is also why American Express isn’t accepted everywhere, as they charge a higher fee.