P.S. Given the realities of online fraud, it's like that any online pay service, were it to become widely used, would suffer the same problems Visa, MC, and PayPal have suffered.

The only fix I can see is for a credit card company or online pay service to set up strict security requirements for its customers and transactions. The drawback to this is that it annoys people, and would probably keep a lot of people from signing up. People wouldn't want to fax a copy of their drivers' license and wait several weeks before they could open a PayPal account. And they would get annoyed, having to call to confirm each online transaction they made.

Still, that might be open niche for a PayPal competitor.