Can the merchant just refuse to take the payment via card then? Saying they will not process the transaction?

I am asking both from a legal and a practical standpoint.

I can complain all I want to Visa/MC later on, but in the meantime I just won't get my goods/services.

Its hard to argue with some tellers and it doesn't help when they ask you for your zip code and you refuse and they start looking at you funny.