A simple regulation blocking bitcoin adoption (in the European Union)

Widespread adoption of bitcoin (BCH) as a medium of exchange is and should be, I think, the goal of promoting cryptocurrencies. All the other reasons for using bitcoin (privacy, store of value) only works if you can actually use it for its primary purpose.

I've been looking into what might be holding back bitcoin adoption and came across one EU regulation that I think does a lot of damage. Now, the primary alternative to cryptos is paying by credit card. Such payments incurs a fee paid to credit card company. It's been a few years since I looked at it, but if I remember correctly the fees ranged between 1-2 percent of the amount.

For a vendor with thin profit margins this is obviously significant and it should be easy to persuade him to adopt practically free alternatives, like physical cash or bitcoin. However, if his customers prefer paying by credit or debit card, the vendor's options are limited - if he doesn't accept cards, his revenues will fall, so he has to accept expensive credit cards as a means of payment.

Here's where the EU regulation comes in: the cost of using a card is isolated to each use, so it should be easy for the vendor to "pass on" the cost to those of his customers who prefer this means of payment. Let them pay a surcharge that covers the vendor's cost. However, this practice is illegal in the EU: the vendor can choose to accept credit cards or not, he cannot set a fee for their use. Therefore the customers perceive the use of credit cards as free. Effectively, the costs are passed on to all the customers so the users of alternative means of payment are forced to subsidize credit card use.

We therefore have a sort of Gresham's law in action, where an expensive means of payment is made comparatively cheap and therefore drives alternatives (cash and crypto) from the market. For the vendor, the economic advantage of crypto is clear, but he cannot force it on his customers. And since the customers don't see the costs of credit cards, crypto is little more than a novelty to them - there is no clear economic incentive to use it. All due to an obscure regulation.

I don't think this regulation was intentionally aimed at crypto, it just grows out of the EU ideology of "efficient markets", plus electronic payments are easier to surveil, plus I can imagine some lobbyists from banks and Visa and Mastercard were in Brussels. I think if it could be repealed, and if people became aware of how expensive credit cards are relative to other means of payment, then bitcoin adoption in Europe would pick up. In order to make this change some influential lobbying groups with clout in Brussels are needed, but I think the principle here is correct.

What do you think? Does this rambling make sense? Of course, this is not the only obstacle in the way of bitcoin adoption, but I think it's significant and I haven't seen any discussion about it.

You can see an overview of EU payments policy and links to the regulations here.

Sorry for the long post, my first here. But I'd be happy if someone with more experience in bitcoin could comment.