MasterCard and Visa do not directly offer any fraud protection, at least not in the 1-3% fee. The cost of fraud and prevention of fraud is born entirely by the merchants, and eventually, through higher prices, by the consumers.

What's even more damning is that the online payment flow is a retrofit over outdated and vulnerable technology. Payment fraud could be eliminated almost entirely by a new payment system design.

The credit card companies are simply massive and slow monopolists begging to be disrupted, that nobody has the capital and courage to attack.

>MasterCard and Visa do not directly offer any fraud protection

Who pays for the chargeback dispute process?

They don't offer fraud protection, but still track and deal with fraud on their own network. They have to deal with international laws. They can and will decline transactions or cancel cards. They keep track of how merchants are being used.

A company I've worked for has the letters to prove it. You do not want to get a certified mail envelope from MasterCard (not a merchant or bank, MasterCard) containing a letter with a short deadline.

Needless to say, shit got fixed. Quickly.

I have been dreaming of it for a while, but the capital requirements are so insane that it could really only be backed by a bank. A bank who probably likes the status quo right now. Paradoxically the more popular your service, the harder it becomes to get it off the ground, as you need to put up potentially tens to hundreds of billions a month to cover the credit issued.

Couple this with the fact that interest rates are so high right now, that you would also likely get impaled on the interest of any loans you took.

Maybe ask for favorable terms from merchants, but then you are reliant on the wolves to bring a better life to the sheep.

So frustrating.