It's not a government problem, it's a competition problem. Fundamentally 1-3% is actually a very competitive rate for organizing the easy transfer of money and handling fraud. Merchants would rather the cost be free, and banks may want a larger slice of the pie, but until someone comes up with a better way of paying money for both sides this is the best we have. If government got involved all that could happen is fees would increase and then we'd miss out on future efficiency improvements and savings.