Your causality chain doesn't track for me. Here in Denmark we have the same consumer protections, the ability to do chargebacks and the (government funded) guarantee that the consumer does not lose any money if their bank account is drained. Yet we still have very strong protections at the time of purchase with mandatory chip-and-pin as well as 3D secure (which replaced Verified by Visa).
I don't really think there's a rational reason for why you don't have better card security in the US. You just seemingly don't want it.
My guess is the difference lies in the fact that the EU limits credit card fees to something around 0.5%
That means the CC companies can't offload the financial burden of this onto the vendors (and they in turn onto their customers), which leads to them having an actual incentive to improve security.
> That means the CC companies can't offload the financial burden of this
Most CC company (CCC) revenue comes from charging the poor people who can't pay their bills ("interest"). Merchant fees are only a small portion of revenue for most cards [1]. In the case of Discover for example it's less than 10% of their revenue, and in the case of Amex it's less than 33%. Other cards fall in-between.
Your link explains that the issuing banks charge interest, not the credit card companies - which are merely the payment processors. I don't know all of the companies listed, it's possible that some are two in one and have their own bank as well. Some payment processors are partly owned by major banks too. But take the largest CC company, Visa: They don't extend credit at all, they don't even issue their own cards iirc. All their profit comes from fees, because the fees are too damn high™.
They've successfully convinced the public of the opposite though. It's a very common misconception that only "suckers" who buy on credit pay for it and that everyone else is getting a free service as long as they pay off their cards in time. In reality everyone pays because the merchants have to pay those fees and they pass the cost on to the consumer.
There's a recurring myth, very prevalent in the US, that credit card companies would prefer people who pay off their bills every month as cheap margin versus being predatory. It's bizarre, and as you've pointed out, completely unsupported by how they actually make their money.
This seems to ignore losses and credit risk entirely. Someone who pays off their bill every month has no credit risk and the fees earned are unimputed revenues. I’m not saying their analysis is entirely wrong, but I would expect unsecured credit losses to be fairly high in the consumer credit market.
Did you ever try a chargeback? With EU banks, it’s a bureaucratic process in my experience, filling forms, dealing with humans, waiting for merchant response, proving contact with them etc. US banks seem to operate on a magic word “chargeback”: you utter it, the charge is reversed, done.
As is often the case, the answer to the European asked question of "Why don't you just _____" is not "We seemingly don't want it", it's "America has a population 66 times that of Denmark."
Systematic change is slow and difficult. FedNow (secure, instant payments directly between accounts) was released 12 days ago, after nearly a decade in preparation.
Pretending that Americans just "don't want" more secure payments is just ignorant, in my opinion, and really screams that the author should spend more time with folks of other cultures.
That argument goes both ways: each country in Europe might be smaller individually, but at the same time I can pay with my debit/credit card all across Europe, and the same is true for each other EU country. And I still enjoy all of the aforementioned protections and services.
So despite the EU consisting of 27 separate member states, with their own banking systems, we still managed to standardize those banking systems enough to offer all of these services across the continent.
I don't really think there's a rational reason for why you don't have better card security in the US. You just seemingly don't want it.