April 29 (Reuters) - Target ( TGT ), Walmart ( WMT ), and other

retailers have urged a U.S. judge to reject a proposed

class-action settlement with Visa and Mastercard ( MA ) over credit and

debit card fees, saying the accord does not go far enough.

The companies opposed the settlement in a series of filings

on Friday in Brooklyn, New York, federal court, where Visa and

Mastercard ( MA ) have battled claims since 2005 that they artificially

inflated some fees on merchants in transactions involving

consumers' credit or debit cards.

The settlement with merchants, announced in March, would cap

rates for card fees for five years and give sellers more

authority to offer discounts based on the use of certain cards.

Under current rules, merchants cannot "steer" customers to use

cards with lower fees.

Visa and Mastercard ( MA ) denied any wrongdoing in agreeing to the

settlement, which lawyers for the plaintiffs estimated will save

merchants nearly $30 billion.

The retailers' objections tee up what is expected to be a

major showdown over the fairness of the settlement, which

requires court approval.

The objectors complained in their filings that Visa and

Mastercard ( MA ) would be allowed to resume anticompetitive practices

after a five-year pause. Some retailers called the accord's

purported benefits "illusory."

Walmart ( WMT ) in its filing said small local merchants "traded

away the interests of large national merchants for relief that

is worthless to the members with the most at stake in this

litigation."

Target ( TGT ) argued that the proposed settlement "would provide

cover for a naked price-fixing agreement between Visa and

Mastercard ( MA )" if it is approved.

The National Retail Federation called the agreed rate

reduction a "drop in the bucket," saving merchants some $6

billion a year. The industry group said Visa and Mastercard's ( MA )

credit card fees were $100 billion last year.

A preliminary hearing on the settlement is scheduled for

June 13.

In re Payment Card Interchange Fee and Merchant Discount

Antitrust Litigation, U.S. District Court, Eastern District of

New York, No. 1:05-md-01720.

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