> It's not the same thing. With chargebacks, in the case of fraud the payment processor almost always extracts the money from the seller, acting both as a deterrent and reducing the cost of the protection. If it was just insurance, it would be more expensive (because there would be less deterrent to (seller-side) fraud and it would cost more to recoup the costs).

It's still possible to do that by having the insurer escrow the payment in cases where you want the insurance, if that's actually more efficient.

But sometimes it isn't. Doing it that way subjects you to buyer fraud where the buyer actually receives the item, claims not to have and has their money refunded. The cost of that has to be paid by honest sellers, which then have to charge higher prices to honest buyers.

And an insurer who can't recover their costs from the seller has more incentive to vet the sellers (and buyers) so that they aren't insuring fraudulent transactions to begin with, which could plausibly have lower overhead than sellers eating the entire cost of buyer fraud.

Different choices may be more efficient for different transactions. A transaction between a reputable buyer and a reputable seller will have low insurance costs even without escrow. A seller with less reputation would have higher insurance costs, but can mitigate the cost by offering to accept escrowed payments but only from more reputable buyers. A buyer with less reputation could do the opposite, buying from a more reputable seller at low insurance cost by waiving the ability to easily reverse the transaction.

Forcing everyone into the same box only creates inefficiency.