It wasn't free and it would cost him about $15-20/month plus roughly 3.5% of the transactions but that's pretty cheap. He could pass on 4% to his customers which would only be about $.50 to them and he didn't care about the monthly fee.
As the seller (of the credit card setup) it's understandable that this is the thought process. But as the consumer (league operator) it looks like this.
To pass on the credit card charge to our customers, we would have to raise prices. In our industry, you can't raise prices by 3.5%. For a $40 league fee/team, that would make the price $41.40. While you could do that, it is impractical. It's not like a gas station where the price increase is as granular as a tenth of a penny. League fees are almost universally divisible in even dollar amounts by the number of people who play, to keep things simple for the payers and the payee. What happens if three of the five who pay want to use a card and two want to use cash? Do you charge $8.28 to those using a card and $8 to those who pay cash, or is it $8.28 to everyone? If it's everyone, what do you do with the other $0.56? Keep it? Then you get accused of being greedy. Also, you would have to do the tracking per person and that quickly becomes a mess.
So leagues typically charge per team. But is the league fee $41.40 if you pay by card and $40 if paid by cash? Again, certainly doable and the tracking issue goes away, but now you've created an issue for the captain (or whoever pays). Collecting $8.28 from each player is more complicated than they want to deal with. If they collect less, they're stuck, and if they collect more, those who want to pay cash will complain that they're paying too much. I know most people don't care if they pay an extra $.28, but they'll complain anyway and besides, who really wants to deal with that $.28?
So if the charge is passed on, the price increase is usually $5, or $4, or however many people contribute to the league fee. Now you've raised prices $5 to cover a (now $1.75) fee. What do you do with the other $3.25? If you keep it, again you're greedy. If you pay it back another interesting phenomenon happens. Do you pay back all $5 for those teams paying cash and $3.25 for those who use a card? Again, tracking becomes a nightmare. One team complains that they should get more back because they paid cash all season, they're unhappy because they "contributed" more by not using a card.
Eventually everyone will accept cards, or some form of electronic payment. What will typically happen is the LO will absorb those fees and not pass them on at first, then the next price increase will typically absorb them, but here's what happens until that price increase occurs. The federal government doesn't tax that portion of league fees that are returned directly to players via cash payback, trophies, and other prizes. So you keep track of that money separately as non-revenue, not subject to tax. And you can't decrease it or you'll get crucified. That means the 3.5% fee is covered by the revenue portion of the team fee and can become as much as 7% of revenue. Because your revenue hasn't increased but your costs have, that all comes out of profit and becomes a much bigger percentage. Even at a 50% profit margin, profits are reduced by 14%. At a 10% margin, you just reduced your profits by 70%. How would you feel if Uncle Sam raised your tax
rate by 14-70%? That's the net effect.
So even though electronic payment is inevitable, it will typically be aligned with a price increase, and many LO's are reluctant to make that increase until the time is right.
In a not-for-profit league, the fees are just subtracted from the payouts, so the payouts go down an equal amount or are covered by a price increase. In other non-pool leagues, it is exactly the same. Those running the league for profit will be reluctant to start accepting cards until they can justify a price increase and cover the fees, and not-for-profit leagues will be less reluctant.