[averynicepen]

The merchants would be the ones choosing the latter. As you mentioned, a lot of stores are interested in accessing the broader market of people who pay with credit cards/digital payment systems, but are forced to pay the 2.3% credit card fees. Bitcoin offers them the ability to remove this transaction cost but keep the convenience of cashless digital payments, in which case the savings can then be rolled into lower costs, benefiting the customer.

This is still contingent on using a Lightning network to reduce fees on smaller day-to-day transactions, which I agree are too high with Bitcoin proper.

The original Bitcoin whitepaper actually outlines this as one of the main problems it aims to solve, and I'll let the paper do the talking:

  Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third  parties  to process electronic payments.   While the  system works  well enough for most   transactions,   it   still   suffers   from   the   inherent   weaknesses   of   the   trust   based   model.Completely non-reversible transactions are not really possible, since financial institutions cannot avoid   mediating   disputes.     The   cost   of   mediation   increases   transaction   costs,   limiting   the minimum practical transaction size and cutting off the possibility for small casual transactions,and   there   is   a   broader   cost   in   the   loss   of   ability   to   make   non-reversible   payments   for   non-reversible services.  With the possibility of reversal, the need for trust spreads.  Merchants must be wary of their customers, hassling them for more information than they would otherwise need.A certain percentage of fraud is accepted as unavoidable.  These costs and payment uncertainties can be avoided in person by using physical currency, but no mechanism exists to make payments over a communications channel without a trusted party.

  What is needed is an electronic payment system based on cryptographic proof instead of trust,allowing any two willing parties to transact directly with each other without the need for a trusted third  party.    Transactions  that  are  computationally  impractical  to   reverse   would  protect  sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.

[Source: https://bitcoin.org/bitcoin.pdf]