"From a merchant's PoV, the service credit cards offer to them is "customers can purchase something now for up to $XXXX (or higher), the merchant will get paid

"From a merchant's PoV, the service credit cards offer to them is "customers can purchase something now for up to $XXXX (or higher), the merchant will get paid and won't have to worry about credit risk."" Except... the card issuers will almost always side with a customer over a merchant in a dispute. They still have to worry about that credit risk. "Give me a refund or I'll initiate a chargeback!" is a threat with a lot of weight behind it. Mutiple chargebacks and your rate goes higher or you're just dropped altogether.