The companies that provide the cash back get way less than 3-5% of the gross purchase price. Merchant fees, at least for Visa, don't even approach 5%[0] -- it's

The companies that provide the cash back get way less than 3-5% of the gross purchase price. Merchant fees, at least for Visa, don't even approach 5%[0] -- it's more like 1.5 to 3%. And they're definitely not spending all that fee on rewards (and thus taking no profit). 0: https://paymentdepot.com/blog/average-credit-card-processing-fees/ https://paymentdepot.com/blog/average-credit-card-processing...