Under the agreement, the acquiring bank exchanges funds with issuing banks on behalf of the merchant and pays the merchant for its daily payment-card activity's net balance — that is, gross sales minus reversals, interchange fees, and acquirer fees.
Consumers can trigger the reversal of funds in three ways: Card associations consider a participating merchant to be a risk if more than 1% of payments received result in a chargeback.
[3] Visa and Mastercard levy fines against acquiring banks that retain merchants with a high chargeback frequency.
[citation needed] New merchants pose risk to acquiring banks as well, beyond solvency concerns.
A fraudulent new merchant could take a large number of orders, and after receiving payment, disappear without delivering the promised goods or services.