> the banks eat up the loss They don't, they pass it on to the merchant. This is why working with credit cards or paypal is a pain for a lot of merchants and t

> the banks eat up the loss They don't, they pass it on to the merchant. This is why working with credit cards or paypal is a pain for a lot of merchants and that's why you as a user have to sometimes jump through hoops to just verify yourself. Merchants have to do this because they know that they will be paying in case of you getting defrauded.