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I don't' know what "that" you're referring to, but in the USA it is against the payment processor agreement to give a discount for cash. So not illegal, but a contract breach.
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In the UK it is actually against the law.
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To give discounts for cash or for the payment processors to charge above 0% from the sellers?
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A discount for cash is the same as an extra fee on cards.

https://europa.eu/youreurope/business/finance-and-tax/making...

(Yes, I know UK isn’t in EU anymore but pretty sure their rule is legacy from EU)

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Id guess the discrimination itself between these two things and putting it in a contract?
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> ...but in the USA it is against the payment processor agreement to give a discount for cash. So not illegal, but a contract breach.

This may be true, but State and Federal law prevail. In California, this [0] looks to be the relevant regulation:

  1748.1. (a) No retailer in any sales, service, or lease transaction with a consumer may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check, or similar means. A retailer may, however, offer discounts for the purpose of inducing payment by cash, check, or other means not involving the use of a credit card, provided that the discount is offered to all prospective buyers.
Most mom-and-pop places I shop at here in San Francisco either offer discounts for paying in cash or have signs up suggesting that folks pay in cash so the business keeps more of the transaction.

[0] <https://law.justia.com/codes/california/code-civ/division-3/...> The official place to find this would probably be [1] , but that's super down for me at the moment, so I link to something unofficial.

[1] <https://leginfo.legislature.ca.gov/faces/codes_displaySectio...>

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The gas stations doing it have large, permanent roadside signage displaying the different prices for "Cash" vs. "Credit". So there may be exceptions in the fine print of those payment processor agreements. Or the gas stations all know the laws giving them such rights, which the agreements can't override. Or something.
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