When a payment goes wrong, someone has to eat the loss. With a card, the rules say who. With crypto, the answer is usually you.

That is the real difference between the two. It is not mainly about technology. A card payment can be reversed because a whole industry is paid to handle disputes. A crypto payment cannot be reversed because that industry is absent. Here is what that service costs, who really pays for it, and which risks come back to you when you skip it.

The undo button is a service with a price

A chargeback happens when a cardholder disputes a charge and the issuing bank reverses the payment. Someone funds that. The main source is interchange, the fee the merchant’s bank pays the cardholder’s bank. It exists to compensate the issuer for credit risk, the cost of funding the transaction, and fraud liability. In 2025, the average swipe fee on Visa and Mastercard credit cards reached 2.36%.

The percentage fee is only the first layer. Disputes carry their own charges. Stripe, for one, charges $15 in the US whenever a chargeback is filed, whatever the outcome. Since June 2025, merchants who contest a dispute pay a second fee of the same amount. A lost, contested dispute therefore costs $30 in the US in fees alone, before the transaction value.

Then comes the overhead. LexisNexis puts the total cost of fraud for US merchants at about $5.13 for every $1 of direct loss, based on a survey of 513 risk and fraud leaders. That figure covers all fraud, not only chargebacks, and it comes from executives’ own reports. But it shows the shape of the bill. The undo button costs staff time, software and fines, not just the face value of the sale.

The button also gets abused. LexisNexis lists chargeback fraud among the common fraud types merchants face. In its 2024 edition, retailers named fraudulent chargebacks as their fastest-growing fraud type. A reversible system invites some people to reverse payments they actually made.

The twist: fraud is a small slice of the fee

It is tempting to say card fees are mostly a fraud and chargeback premium. The data does not quite support that.

The best public numbers come from the Federal Reserve, and they cover debit only. In 2023, fraud losses to all parties were 17.6 basis points of transaction value, about $17.63 per $10,000. A credit interchange average of 2.36% is 236 basis points. The products differ, and these are not like-for-like figures. But the gap is large enough to make the point. Fraud losses are a fraction of what cards charge.

The Fed treats fraud as one cost among several. For regulated debit, the rule allows $0.21 plus 5 basis points of the transaction value. That cap exceeded the average per-transaction costs, fraud losses included, for 99.2 percent of covered transactions.

So what is the rest of the credit card fee buying? Defenders point to credit itself. Issuers provide credit and bear the risk of non-payment. One explainer describes the issuer keeping the fee to cover rewards points, fraud losses, billing, and the credit it extended. Critics reply that interest already pays for credit risk. One payments firm that sells a competing product argues fraud coverage would justify about 0.10% of volume. Treat that number with care, since the firm has a stake. The honest reading is that the fee is a bundle. The undo button is one item in it, next to credit, float and rewards.

Who actually absorbs the loss

Even inside the card system, the undo button is not evenly shared. In the Fed’s 2023 debit data, merchants absorbed 49.9 percent of fraud losses, up from 38.3 percent in 2011. Issuers took 28.3%. Cardholders absorbed the rest, with their share rising from under 1.8 percent in 2011 to 21.8 percent in 2023.

That runs against the common picture of the bank as the main loser. Reversibility is real, but its cost is spread across merchants, banks and customers, and the split is moving.

What cardholders legally get

The protection is also narrower than it sounds. For credit cards, Regulation Z limits a cardholder’s liability for unauthorized use to the lesser of $50 or the unauthorized charges made before the issuer is notified. Many issuers go further. One guide notes the statutory maximum is $50 but most issuers offer $0.

The word that matters is “unauthorized.” Under the rule, unauthorized use means use by someone with no actual, implied or apparent authority, from which the cardholder gets no benefit. A stolen card number fits. A payment you chose to make to a fraudster is a murkier case, and it depends on the issuer and the facts.

Debit works differently. Under Regulation E, liability steps from $0 to $50 to $500 to unlimited depending on how fast you report. The protection exists, but it has edges.

What crypto removes

The Bitcoin whitepaper reads like a critique of this exact cost structure. Its introduction says completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. It adds that the cost of mediation raises transaction costs and cuts off small casual transactions. And it warns that “With the possibility of reversal, the need for trust spreads.”

Look at who the paper is protecting. It says transactions that are impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers. Sellers got the guarantee. Buyers got a promise that someone would build something later.

The finality itself is a matter of odds. On Bitcoin, an attacker with 10% of the network’s hash power has about a 0.024% chance of reversing a transaction after six confirmations, which takes roughly an hour. That is economic finality. Proof-of-work chains are never technically final, because a competing chain can always outgrow the current one. For a merchant, waiting for more confirmations is the crypto version of risk management.

For a buyer, there is no appeals desk. As one analysis puts it, confirmations deepen settlement but do not open an appeal. A transfer sent to a wrong address is a completed transfer.

The risks you now carry yourself

Take away the dispute service and these risks move to the person who sends the money.

• Scams you authorize. In 2025, the FBI’s Internet Crime Complaint Center logged $11.366 billion in crypto-related fraud losses across 181,565 complaints, up 22 percent from the year before. Investment fraud made up $7.2 billion of that. The FBI notes these figures cover only part of the damage, since reporting is voluntary and incomplete. These are complaint totals, not per-transaction rates, so they cannot be compared directly with the Fed’s card figures.
• Second-wave recovery scams. People who already lost money get targeted again. The IC3 counted more than 10,500 complaints about recovery scams, with an estimated $1.4 billion in losses.
• Typing errors. A wrong address or wrong network is your loss. No one reviews it.
• Seller non-delivery. With no chargeback, your only leverage is the seller’s reputation, or an escrow you arrange yourself.
• Confirmation risk, if you are the merchant. Accepting a payment too early exposes you to reversal on a reorganized chain. Wikipedia’s account of Bitcoin Gold lists a reorganization attack that cost exchanges $18M in September 2018. Large networks are far harder to attack than small ones.

Is the trade worth it?

That depends on which side of the counter you stand on.

For merchants, the card bill is a live grievance. Swipe fees totaled $111.2 billion in the United States in 2024, according to the NRF. In November 2025, Visa and Mastercard agreed to a revised settlement that would cut fees by 0.1 percentage point for five years and cap standard consumer rates at 1.25% for eight years. Merchant groups objected, calling the reduction “meager”. To a seller who loses sales to disputes, a rail with no chargebacks looks like a way out.

For buyers, the math flips. A card buyer pays nothing visible for the undo button. The price is folded into what everyone pays at the register. A crypto buyer gets no refund path and no bank to call. Choosing crypto does not make that risk disappear. It hands the whole thing to you.

That suggests a simple rule of thumb. Use a reversible rail when you are paying a stranger and delivery comes later. Use crypto when you know the other party, when the goods arrive at the same time as the payment, or when an escrow sits in between. Send a small test amount first when an address is new. Treat any message offering to recover lost crypto as a likely second scam.

The undo button was never free, and it was never only about fraud. Cards sell a bundle: credit, rewards, and a referee. Crypto sells finality and leaves the referee out. Knowing which one you are buying is most of the skill.

Sources

• Federal Reserve: 2023 Interchange Fee Revenue, Covered Issuer Costs, and Fraud Losses (Debit)
• LexisNexis Risk Solutions: 2026 True Cost of Fraud Study press release
• Payrails: Payment processing costs explained fee-by-fee
• America's Credit Unions: Credit Card Liability Limits
• Bitcoin whitepaper (as posted October 31, 2008)
• ICAR: FBI IC3 2025 Annual Report
• CNBC: Visa, Mastercard reach new swipe fee settlement with merchants
• Spark: Payment Finality across cards, ACH and crypto