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Sure, I don't dispute that credit cards are technically very simplistic and basically don't have any security.

The huge benefit of them is that almost all those security risks are externalized. If someone uses my credit card fraudulently, I don't pay any of the costs. Basically every alternative (Verified by Visa, etc.) is about shifting those liabilities back to the consumer.

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The costs are distributed evenly, in the form of the markup on all products that covers the interchange fee and losses to charge backs.

You do pay them, but in small undetectable increments all the time instead of random surprise large losses.

Which is vastly superior to the alternative, which is taking on the liability myself and facing the possibility of being financially devastated by fraud and/or theft.

The best alternative is a system where the bank still carries the liability but the system is harder to defraud (i.e. because it does push instead of shared secrets authorizing pull).

So kind of like insurance?

Technically "verified by visa" shifts the liability from the merchant towards the issuer.

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