The whole thing is pretty convoluted. In the US, if the merchant doesn't pay, or is fraudulent then Paypal would have full liability. Same situation with Strip

The whole thing is pretty convoluted. In the US, if the merchant doesn't pay, or is fraudulent then Paypal would have full liability. Same situation with Stripe. From the perspective of a Paypal or Stripe, letting someone accepting credit cards is very similar to extending someone a loan. In the early days of Paypal, fraud almost killed them several times. I've been involved in a smaller credit card processing business and fraud almost killed us a few times. In the current system in the US, legit merchants ends up getting beat up the most, and taking the most liability, in exchange for the convenience of accepting plastic. If someone uses a stolen credit card to purchase goods online or in person, it's their, and they have to pay. And often lose the items sold too. If the Paypals can't pay, then the upstream banks have to pay. Of course this would never happen, so the upstream banks never have to pay. Their risk is totally covered along the chain; so they don't really care THAT much about fraud. Meanwhile, the end users of credit cards enjoy pretty good liability protection, and get paid in miles and cash rewards. So, they're fat and happy. But the poor merchants..