Fraud protection is built into credit cards: It's just not good enough fraud protection, and it has a lot of false positives: I've had to clear charges with my credit card company from a store plenty of times.
The trick here is that stronger fraud protections have to come from the places that have more information: When dealing with credit cards, fraud can happen in any direction: merchant fraud, customer fraud, third party with a cloned card, and even merchants with cloned cards: All trying to defraud someone, and with no one party having all the important fraud related information.
Therefore, in practice, fraud detection is a multi-pronged approach. What is true is that we shouldn't ask anyone grossing less than 100 million a year to have to do any fraud detection: Their online credit card processor should be doing a whole lot of the work, if not all the work, for them, if just because they are ill equipped to deal with the problem. Having to hire yet another company to wrap their own fraud detection tooling around your credit card processing just sounds like making it way too hard to run a profitable online business.
The trick here is that stronger fraud protections have to come from the places that have more information: When dealing with credit cards, fraud can happen in any direction: merchant fraud, customer fraud, third party with a cloned card, and even merchants with cloned cards: All trying to defraud someone, and with no one party having all the important fraud related information.
Therefore, in practice, fraud detection is a multi-pronged approach. What is true is that we shouldn't ask anyone grossing less than 100 million a year to have to do any fraud detection: Their online credit card processor should be doing a whole lot of the work, if not all the work, for them, if just because they are ill equipped to deal with the problem. Having to hire yet another company to wrap their own fraud detection tooling around your credit card processing just sounds like making it way too hard to run a profitable online business.