In the EU, their rake is capped by law, to an order of magnitude less than what they charge in the US. And it's still profitable. (Otherwise they would have pulled out of the market if they were losing money, obviously.)
The fraud prevention/etc you discuss benefits from economies of scale, but their fixed x% per transaction does not reflect those economies of scale. The free market has broken down here because of the difficulty for new market entrants.
The value they add is much greater than their costs. People who deny this lack a lot of imagination to ponder how inconvenient things could be without credit and debit cards.
But we don't need to imagine: If Visa and Mastercard didn't add more value than they cost, then merchants wouldn't accept them. It is still 100% voluntary for a merchant to decide if they want to accept cards or not. Which is a freedom they should have. These cards aren't legal tender.
Then why are there so many of them? I like travelling and almost every country I go to has its own thing going on, often more than one. I lost count long ago
Once you have sane system like pix or upi, there is far less need for chargebacks and frauds.
I doubt the amount credit card companies charge in fees has much to do with the actual costs of running their service and are being inflated just because they can. My guess is that reducing the VISA's costs by letting them ignore security considerations would only mean that consumers get regularly screwed over while VISA continued to raise their fees every year.
We could also cut the cost to merchants by notably more than half if we dropped credit card rewards.
The component parts have been up and running for years.