Merchant agreement is a legal document which cannot be changed...

Merchant agreement is a legal document which cannot be changed easily. As a company eventually needs to make itself profitable, the revenue model leading to a future profit cannot be jeopardised. Otherwise, it's just endless money pouring game. I highly doubt this product was rolled out without the consideration of cannibalisation of their already established revenue stream.

However, that promotion for 10% or 3% cash back is a temporary thing to boost up the customer numbers. This marketing strategy can be changed easily.

For future merchant to sign up, Zip will need to show them greater benefit of a merchant agreement instead of just zip and tap. For retailer, customer acquisition cost is the key. if Zip can prove to convert customers to the merchants, they would be silly not to pay a % commission to Zip. It's costly to pour lots of money into marketing without knowing the end results. Paying commission is from a guaranteed sell.