It is why banks persist despite fintech.<p>Banks attach almost 3% of fees to a credit card transaction, and some percentage of that is management of fraud of various kinds including "merchant defrauded customer."<p>It is a core competence of a bank to deploy capital to manage risk and to send lawyers to court to demand payment, etc.<p>If you paid somebody $1000 in cash you could take somebody to small claims court and maybe you win. Maybe you collect. If you can't collect the worst you can do is put a black mark on that person's credit report.<p>It's a hassle.<p>You can dispute the credit with the bank on or with a phone and probably never hear about it again. They might just take the money out of the merchant's account and let the merchant sue if the merchant has a problem.<p>Some of that money finds its way to the political system to maintain the privilege of the banks to conduct business as they do.<p>The small merchant feels resentful about fees because they pay them directly. Yet, the merchant is a source of risk in the system and owes something to the banks for insuring it.<p>A big merchant feels the same way times 10^5; since the Clinton years Wal-Mart has wanted to own a bank so it could self-insure risk. Congress did not allow it and has not allowed it.<p>If Wal-Mart had been allowed to do so, so would have Amazon and Google and Facebook not to mention mundane retailers and direct-to-consumer brands, etc.
It would be enough if they wouldn't actively encourage scammers. Seems like everyone knows at this point that Paypal and ebay's "buyer protections" actively work against the seller. I myself was out $1300 after selling a Macbook Pro, after which the buyer put in a claim for a refund, saying that his account was hacked. Paypal was made whole, the scammer got the laptop, I as the seller was left out to dry.<p>Since then I haven't used Paypal again. And I never will, either.