Comment by lxgr

> It’s not being paid with my own money. If I can get 2% cash back, then the situation is I either pay 98% of $x, or $x.

The counterfactual isn't getting or not getting 2% cash back, it's the merchant paying or not paying ~3% in fees, a part of which you get back from your issuing bank as a kickback to keep participating in and advocating for this scheme.

Of course this would require regulatory action. Absent that, the status quo represents the stable equilibrium.