I'm staying in Cabo San Lucas and have noticed that businesses here tend to either be cash-only or provide big discounts when paying in cash. For example a whale-watching company mentions that:
We accept VISA, MC, USD, Mexican Pesos and Euros cash only. We offer a 15% discount when paying for your entire tour in cash.
Same with a diving company:
Payment Methods: VISA, Mastercard, PayPal & AMEX 10% Discount for Cash (USD, MXN, CAD).
Same with a sightseeing company:
You may pay directly on the day of your trip by MasterCard, VISA, travelers' checks or cash (10% discount for cash payments).
Is this because banks charge so much for card transactions in Mexico? Or does this happen because of tax issues? In the US I wouldn't be surprised if a business offered a 1-5% discount for cash, but 10% or 15% would be highly unusual.