That is authorising the transaction and it makes sense for the card issuer to handle that. It's proving that it's "you" using the card and you really intended to pay for that thing.

The case where you have a dispute with the merchant (i.e transaction is authorised but problem is 1 layer up - reality is wrong!) is different. You paid as intended but the thing you wanted didn't happen. Right now those are bundled together.

Sometimes this is handled by marketplace (think aws, vs paypal/ebay and their balance of favouring merchant vs consumer) but overall (e.g. consider shopify who are basically uncontactable in case of merchant disputes) I don't think the payments system makes this very clear. It could be made clear who has the responsibility for resolving merchant disputes and this could be a more explicit point of difference in service offerings.

P.S. There are a LOT of details in this specific idea, some consumers are bad actors and are never happy, some merchants likewise are bad actors. Resolving these issues without disclosing sensitive information is extremely difficult. But largely processors are sort of punting on it in various ways when common sense resolutions seem possible. Like if a consumer has 50k transactions with 0 chargebacks and they initiate a chargeback, it's probably a merchant problem. This argues for collapsing the layers but channel-specific resolutions have the advantage of being able to look for delivery signals and other specific mechanisms of performance. Figuring who is right in the world is a hard problem in general. Possibly the Stripe Elite will correct me here since this is the Hard Problem of payments. Which can be solved well enough with statistics. Payments has a whole lot of Hard Problems which seem easy at first, it's a great area.

Now you are just confusing consumer protection with having a secure online payment system, which credit cards are not and never will be. The entire "transaction approval" shtick is just a bandaid for passing a static password around in clear text, your credit card info.

Consumer protection deals with chargebacks after the payment was made and the products/services are not delivered to required standards. This gives enormous power to credit card companies against merchants and enables obscene rent extraction against consumers who don't require it, yet still pay 2-4% more on everything they buy, even with other payment methods.