I don't think I made such an assumption. He's saving money, regardless of whether ignoring credit card security was an intentional money saving move, or merely a happy side effect of ignorance or incompetent.

The person I was responding to was taking the position that you should not take against against someone if they are not harming you. That money saving, regardless of how it came about, harms OP's business, and so justifies action.

Note I didn't say the action should be calling authorities. Contacting the competitor and letting him know there is a problem would be action, too.