I wonder what the chargeback and fraud rate actually is in practice given they do ID verification. Pretty difficult to claim you didn't make the purchase depending on what they collect.
Having verified somebody's government ID doesn't actually factor into chargeback decisions and outcomes, not least because many forms of online KYC practiced today in the US are pretty laughable from a security point of view.
True, but for merchants that ship high fraud risk physical merchandise, it's becoming increasingly common to ask for a copy of a drivers license or other government issued photo ID (from a recognized US state or Canadian province, in the North American market) before a product gets shipped. I've seen this from a number of persons adjacent to a completely different forum who frequently buy things online like rifle scopes, spotting scopes, rangefinders, camera lenses, etc.
Getting a copy of the ID, only shipping to card billing address, using a signature on delivery required shipping option considerably cuts down on the number of fraudulent orders.
Once information stolen its easy to produce a digital fake ID with the info thats sold on the dark web and used everywhere. Private KYC collecting merchants rarely have the ability to authenticate the full gamet of valid types of government IDs.
Contrary to incredibly popular belief (at least in the US), asking for a photo of somebody's ID is actually not a sane way to do KYC. The point of an identity document is to check its security elements in person and compare the photo to the person standing in front of you. (Part of this can be replicated by doing a live video call, but that window is quickly closing due to deepfakes.)
Yet countless times in the past years, US and a few other companies have asked me to "identify myself" by sending them a scan of my goverment ID via chat/email/web form attachment, with absolutely no liveness check. This is just insane.