Do credit card companies require a merchant to sell a product to submit a charge?

For example, do online cash advance companies just charge a credit card for cash, pay the transaction fee to the credit card company and charge their own fee to the customer; thus, a cash advance company would take no risk? Then, could a person create a site to do the same and just undercut the margins in this business?

Public Comments

1. As long as the transactions are separate. It will work, but you will not be able to remove any profit without creating a falling house of cards. By triggering a withdrawal everything will come to an end before it can continue again.
2. I'm not sure of if you can get a merchant account without a product. What I do know is that my bank's ATM network is already undercutting YOUR cost for cash advances.