That's not moving the liability the buyer, that's just part of the insurance cost. It doesn't cause the buyer to be less careless or care more about security. And there is still currently no plausible cash-equivalent over the internet.
> Again processors make money when transaction volume is higher. If this reduced transaction volume why would they do it?
Insurance companies make more money when everybody has to buy insurance. How is that an argument for forcing everybody to buy insurance? "Middlemen make more profit" is an argument against.
> Average merchant interchange is around 3% and there are 2% cash back cards, so it’s 1% net, meaning I’d be out $2000, so break even.
You're using peak cash back and average interchange fees. The cards with 2% cash back aren't the cards with 3% interchange fees. And you're not accounting for the merchant losses from the chargeback itself which causes them to have to charge higher prices. Meanwhile a legitimate $2000 chargeback is atypically large.
Those numbers go even further south for people with bad credit who can't get a cash back card and then have to shop at low income merchants who suffer a high customer fraud rate, meanwhile they won't be making a large legitimate chargeback because they can't afford purchases that large to begin with.
> Not to mention the interest-free one month loans, car rental insurance, loss insurance, warranty extensions and so on.
Marketing gimmicks that purposely sound valuable but aren't worth very much in practice.
> So you’re speculating in spite of the fact interests are currently aligned.
You're asking for data so I'm asking to run the experiment. How else do you get better data?
And your claim that the interests are aligned ignores the cost of the insurance. If you can get a discount for waiving your right to a chargeback for a merchant you trust, it's basically free money, and your interests are both aligned in not paying for insurance you don't need. If the fee is then high to have a right to do a chargeback against the shady merchant you don't trust, maybe there is good reason for that.
> And setting aside that the choice specifically exists for all brick and mortar merchants - so is there some reason they’re a poor sample?
The sample is confounded because many merchants don't offer a cash discount but many credit cards still offer cash back, and cash is slower, so many customers prefer credit cards for reasons outside of the ability to refuse charges later.
But even then, many people nonetheless pay cash, especially when the discount actually exists. If the value of being able to do a chargeback was so great, why would anybody ever do that? More importantly, why shouldn't they be able to, including over the internet?