[pmorici]

"And for those areas of high credit card fraud, what do merchants do now?"

Nothing, they lose out on the sale.

"It would be useful to know why those 30% of Americans don't have a debit/credit card."

Typically because of past financial difficulties. If you've got a bad credit record, or have a history of over drafting your bank account banks will refuse to work with you.

As an aside if you subscribe to the idea that Bitcoins transaction mechanism is the valuable aspect of it then the value of a Bitcoin is going to have to rise enough to handle the value of the transactions that pass through it. It can't be worth zero and still work.