Again this is guy operating on all cash everywhere and clear case of deliberately not reporting all income in white.
Not true. Merchants who accept cash only and hesitant on cards doesn't mean they are trying to hide income. There can be many instances , for ex their supplier might accept cash? Or this card thing is done by only like 20% of their customers.
Btw why some shops charge while others dont. It has nothing to do with big or small shops or hotels.
Is it bank or gateway specific?
It has to do with the volume, banks, acquirers , merchant service providers (ISO's/sponsor bank) loves volumes. The more they accept the better it is for merchant account provider. Now indirectly giving volume to merchant service provider means you are a big shot like reliance fresh or best price or vijay sales. Merchant account provider won't give good treatment to small shops or small business owners as they don't get special treatment anywhere anyways. And small business dont know how to negotiate, or they think they can't negotiate on the MDR which is not true.
Now a big hotshot like reliance fresh's HQ's knows how to negotiate and they give this as tender to top 5 banks, and whoever gives them best rates, they select them.
Some biggest volume provider such as Amazon get's a very different treatment like OTP integration is done on their website itself. You might have noticed Amex, ICICI, doing OTP integration on amazon itself(though they do give option to do it seperately on a private session with the bank's API). Why will a bank risk such an integration which can put the bank on a risk for millions ? Because of volume and current standing.
More on why merchant account provider love volume (a bit difficult to understand - ignore if you don't understand how merchant services work)
There is a reason a merchant account provider loves volume, one reason can be if they provide volume, they can onboard high risk merchnats (such as one selling e-cigs? or ammo , porn? there are many examples) but this info is buried deep on the internet which I was able to get to recently. Now business such as let's say adidas, reliance fresh or amazon gives a merchant account provider named XYZ volume of let's say 1cr (not amount, count as transaction counts) so XYZ can give those merchants max 1% Chargeback/dispute volume, now these are all low risk merchants and they hardly get CB. from 1cr , 1% is like 1L cb's right? now let's say adidas, reliance fresh or amazon get's only like 15k cb's, so XYZ still has 85k cb's that they can accept because VISA/AMEX/MASTERCARD gives them this limit. How do they use it ? They use it to offset these to high risk merchant and they charge high risk merchants ALOT of fees with refundable rolling reserve in case busines gets alot of CB's.
A bit on how XYZ determines high risk merchant : so a guy named Atul goes to pornhub to watch ofc porn, and stumbles onto some popup saying buy this med and you will get a big penis etc" atul is interested and buys the damn thing, and once he get's it , it doesn't work. Atul calls this company who sold this product and finds out they are in some small village in tamil nadu and doesn't know how to give even customer service and they decline on giving the refund or replacement. Atul feels this is a fraud, he calls his debit or credit card company and disputes the charge hence a chargeback.
Now XYZ received that chargeback on behalf of that high risk med merchant they on boarded and they charge that company $40 fee for dispute and gives them 3% max limit for disputes.
Now visa/mastercard/amex only gives 1% limit for cb's (unless there is a breach then it's fine) how did xyz gave those high risk merchant 3% limit where visa/mastercard/amex gives only 1% limit? they use that limit of 85k that low risk merchant such as adidas, amzon etc didnt use and they charge 3x the mdr fee to high risk merchant as they used to charg for the low risk hence balancing the cb's limit to 1% as instructed by visa/mastercard/amex.
This is bit difficult to understand and alot difficult to write here, so I apologize for this, I used to be dispute analyst 4 yrs ago at American express hence I know the inside and out of this. However there can be many other reasons why merchant service providers love volume.