"It's really the merchant getting hosed. He has to loan the purchase price, interest free to the customer for a month, then to the CC company for another month, AND pay 3% for the privelige."
Not so, at least not in standard retail. When we make a CC sale, we have the money in our account in about 3 days.
How long has that been the case? My information may be out of date (and may have been incomplete even back then).