Both payment cards and merchant terminals (essentially also using embedded or removable smartcards) are tamper-resistant and hold symmetric keys only known to the payment scheme or issuer.

The terminal essentially creates a cryptographic secure channel between two smartcards, and they transactionally agree to decrement the balance on one, and increment the one on the other correspondingly.

The really neat thing is that this theoretically even works without the need for central accounts, and is as such very privacy friendly. (Practically, even just one key leaking would have catastrophic consequences though, and to detect whether that has happened, systems usually aggregate all transactions asynchronously and check money movements for plausibility.)

it's okay

there's already some fraud, waste, loss, inefficiencies, accidents (packages lost, chargebacks by mistake, package arrives weeks later)

....

that said the chips have some physical protection, it's not trivial to clone them

and the chip has a variable where it stores how much more you can use without online confirmation

of course, these are cheap protective measures, but to crack it you would need more effort probably than the total credit that's assigned for offline spending