[FooBadDev]

So consensus largely is - probability of fraud is higher in adult entertainment business, downstream processors either charge exorbitant fees or altogether refuse to accept such payments, to mitigate having to deal with chargebacks.

My question is, Why is chargebacks still a thing ? Why hasn't the US adopted 2F Auth for payments ?

With advent of smart phones we can have reliable identification based on two factor authentication, by sending a text message to mobile number registered with the bank, or even go further with text + fingerprint / text + password. The odds of fraud with such system would be minuscule.

Is there any reason apart from banks being greedy and the government being hand in glove with them ?

[pentae]

It actually runs deeper - the reason 'probability of fraud is higher' may as well be called 'probability of buyers remorse' is higher. In the industry we call it friendly fraud. When a customer finishes what he came to finish doing, the regret of spending 50 bucks can often result in a call to the bank. Some credit card providers make it even easier you can just click 'dispute' online and pretend like it was fraud to get a refund.

Interestingly, 3D Secure (verified by visa etc) was created to solve the issue of friendly fraud, but whats mystifying is it applies for all categories except for Adult.

Of course, this isn't the whole story, there's other factors like aggressive affiliate marketers - but it's a big part of it.

[perrin68]

Chargebacks protect buyers from dishonest sellers?

[FooBadDev]

Shouldn't that be job of a consumer protection body ? Banks should not be in operating in law enforcement domain / be deciding what's right or wrong.

My understanding is most chargebacks are for fraudulent transactions, which were not authorized by the card owner.