The whole thing is pretty convoluted.<p>In the US, if the merchant doesn&#x27;t pay, or is fraudulent then Paypal would have full liability. Same situation with Stripe.<p>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&#x27;ve been involved in a smaller credit card processing business and fraud almost killed us a few times.<p>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.<p>If someone uses a stolen credit card to purchase goods online or in person, it&#x27;s their, and they have to pay. And often lose the items sold too.<p>If the Paypals can&#x27;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&#x27;t really care THAT much about fraud.<p>Meanwhile, the end users of credit cards enjoy pretty good liability protection, and get paid in miles and cash rewards. So, they&#x27;re fat and happy.<p>But the poor merchants..