I haven't had to deal with credit card processing in ages, but looked into it recently. I see that Square charges 3.5% for basically a manual entering of the credit card data. This is barely better than Bank of America was charging 15 years ago. It's 2.6% for magstrip/NFC/chip which is still pretty outrageous. Why?

I suspect a lot of it is because retailers have baked the prices in, so consumers don't realize how screwed they are getting. And then certainly most retailers don't give you any discount for cash.

Perhaps my question should be rather, why isn't the Lightning Network destroying credit card processing? But in any case. Is there some obstacle I'm missing? Is there anything we can do to change this?