It was VISA et al's way of taxing people purchasing with cash. They had contract terms that wouldn't let you sell at a discount when the customer paid in cash; under Obama the federal government finally banned them, and several states had already done so, but I think usually only for gas purchases.
I think the contracts (or consumer inertia) still make stores advertise at the credit-card price, and the different price for cash has to be advertised as a discount.
VISA et al can still take away a merchant's ability to charge customers' credit cards if they catch you asking for minimum payments on cards or offering discounts for cash. It doesn't happen all the time, and usually consumers don't report establishments that practice this behavior.
From that article it sounds like it was part of a lawsuit that was settled. I had thought it was through one of the consumer financial protection bills that happened after the housing bubble pop.
ah, yes, that particular angle could probably use some more research. I haven't read the consumer financial protection bills, but then again most legislators probably haven't either, and there certainly could be some loopholes that someone is trying to exploit right now.
Also important to note that most merchants opted NOT to switch to charging extra because it would have upset their customers, so really, by allowing that in the past, it primed consumers to expect the same price for both. Tricky devils...
I think the contracts (or consumer inertia) still make stores advertise at the credit-card price, and the different price for cash has to be advertised as a discount.