The optimal amount of fraud is not zero. Merchants, and consumers, both benefit from the equilibrium where there is much more commerce, backstopped by bank fraud detection.

Credit card fraud is just not a large problem in the US, and the extra commerce encouraged by continuing to use a relatively insecure system generally outweighs the benefits of tightening security.

Tokenized NFC payments are even more convenient than swiping credit cards, and they’re gradually replacing the old system, but there is no urgency here.