Most, if not all, credit card issuers grant their cardholders the right to dispute charges that appear in error on their statements. If a consumer does this it results in a charge back. Eventually this charge back reaches your merchant account where there must be funds available to cover it. If funds are not available to cover the charge backs in the merchant's account then the issuing bank has to absorb the loss. It is in the determination of this risk that the amount to charge in discount rates, transaction fees, statement fees, and reserve amounts are determined.
Banks use many different criteria to determine the risks of taking on an Internet merchant account.
Many banks try to minimize their level of risk by not issuing accounts to certain businesses that have proven histories of high charge backs. Some banks will require a cash reserve to be established for high-risk industries or new merchants. Other banks may not issue merchant accounts to new businesses instead they will require a year or so of business history before accepting them. Other banks may require a physical site inspection by an independent firm to reduce their loses. Some will even set limits on the amount of transactions that you can submit.