The merchants lose when there's fraud/chargebacks, not Visa. Visa forwards that cost to the original merchant. That incentivizes them to be more vigilant about

The merchants lose when there's fraud/chargebacks, not Visa. Visa forwards that cost to the original merchant. That incentivizes them to be more vigilant about fraud protection, e.g. having to put your zip code in at the gas station. And the banks that issue the cards are the ones that pay points/get interest, not Visa. Visa simply processes the transactions. If you noticed, your "Visa" card has a bank issuer, like the Capital One Quicksilver card (which uses Visa network) The cost of running a transaction network has nothing to do with credit card points, insurance, chargebacks. Those are all handled by other parties.