Many merchants and trade groups including the National Retail Federation opposed the accord, saying card fees would remain too high, while Visa and Mastercard would retain too much control over card transactions.
The decision could force Visa and Mastercard to negotiate a settlement more favorable to merchants, or go to trial.
Visa and Mastercard said they were disappointed with the outcome.
Some U.S. senators have promoted legislation, the Credit Card Competition Act, to let merchants use other payment networks to process Visa and Mastercard transactions.
The judge's decision does not affect an earlier $5.6 billion class action swipe fee settlement among Visa, Mastercard and about 12 million merchants.
Persons:
Brendan McDermid, Margo Brodie, Brodie, Nilson, Doug Kantor, Jonathan Stempel, Deepa Babington, Leslie Adler
Organizations:
Mastercard Inc, New York Stock Exchange, REUTERS, Companies, Mastercard, National Retail Federation, Visa, National Association of Convenience Stores, U.S, Merchant Discount Antitrust Litigation, Court, Eastern District of, Thomson
Locations:
New York City, U.S, Brooklyn, Manhattan, Eastern District, Eastern District of New York, New York