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I would not even see that as a problem if it made it such that vendors got the same regardless of if they use cash or credit.
Credit card companies are not owned by the government. If there were no fees being charged for using them (fees currently paid by the businesses the cards are used at) then they would raise rates on apr to make up for it. While that wouldn't harm me and if earning points went away I'd be sad (if points actually reduce or go away from it), it would mean everyone in the poor financial situation of having credit card debt (which is a huge amount of people) would owe even more money to the creditors.
What I do know is that wal marts and targets and amazon would just pocket the 2% or so that go to creditors right now. Their savings definitely would not trickle down to the consumer.
wal mart, target, and amazon price assuming the fees from credit cards and as much as I hate walmart it is in competition so it likely would actually result in lower prices. Large places don't want to do a two tier the way small bussnesses will with cash vs credit. I agree that government does not own credit cards but that is irrelevant. The government can regulate companies and financial institutions, especially in regard to monopolies or in this case douopolies.