PayPal spent $300M learning how to deal with fraud[0]. This money is in terms of investment in development and outright monetary losses. The problem is you can't get a large number of users while you are also being taken apart by fraud. When dealing with payments, finding users is not your hardest problem.
[0] Source: One of the investors in my company was involved fairly early in PayPal. We've had many conversations about this matter, especially regarding another company I was working with at the time that was building an "anonymous" wallet.
And all of this because the credit card model is fundamentally flawed. When buying something it's like sending the seller a trivially copyable key to your vault and letting him get the money he wants.
While I agree that credit cards could be a whole lot more secure (using the same token for identification and authentication is just plain stupid) fixing that still leaves you a long ways away from solving the fraud problem.
E-gold used username/password pairs and seemed to be making pretty good progress towards solving the 'using someone else's account' kind of fraud.
The kind of fraud that killed e-gold (and I think, the harder kind of fraud to solve) is "he sold me a defective whatsit" or "after I paid him, he never sent my thingamajig"
If you don't solve that harder problem, you quickly become known as the payment method of choice for criminals.
That isn't a harder problem. It's a much much easier problem. YOU can decide where to buy from. It's a much saner system from both the customer and the seller's perspective.
And it works right now. In the Netherlands there is a system called iDEAL that works like this:
1. You go to a seller's site e.g. bol.com (which is like amazon).
2. You fill your cart and click checkout.
3. You get sent to your bank's site with a page that displays the amount and a button "pay".
4. The bank then transfers the money to bol.com.
They stated as a design goal that you shouldn't be able to back out of a transaction once it's gone through. The problem was that the system became popular with sellers of fraudulent goods, and this does, eventually, start to cause problems.
I suspect that iDEAL has some way of letting you report fraud and get a refund from your bank if you get ripped off. they probably have some form of chargbacks, etc.
It works like wire transferring money to the seller, you get the same rights and protections. In fact it is wire transferring money to the seller.
Charging back is not easy, but it is not a problem in the least. It's only a problem when you buy from people you don't trust (but then I wouldn't want to give them my credit card number at all!). This does happen on sites like ebay. The risk is moved from the seller to the buyer. For sites like ebay you need a middle man to be safe, only now you need it as a buyer instead of as a seller.
[0] Source: One of the investors in my company was involved fairly early in PayPal. We've had many conversations about this matter, especially regarding another company I was working with at the time that was building an "anonymous" wallet.