Payment Processing for Precious Metals Dealers in San Jose and Silicon Valley

Precious metals dealers payment processing in San Jose and Silicon Valley is shaped by one fact: you are selling something that is nearly cash, at a price that changes by the minute, to buyers who can dispute a card payment for months. The coin shops and bullion dealers scattered through San Jose, Campbell, Los Gatos, Sunnyvale and Palo Alto, plus the online dealers that operate from the valley, serve a customer base of engineers, founders and retirees who buy in size. That combination of high ticket and high resale value is why mainstream processors decline the category, and why the processing setup that works looks different from a jewelry store's.

How underwriters see MCC 5094

Precious metals and stones dealers sit under MCC 5094. Underwriters see a large average ticket, a product that fraudsters can liquidate immediately, a price that can drop between order and delivery (which invites buyer's-remorse disputes), and a card-not-present channel for online orders. That profile brings a detailed review of your bank statements, processing history, refund policy, shipping controls and compliance program, and it typically brings a rolling reserve at the start. Our guide on how underwriting works for a high-risk merchant account shows what the reviewer is weighing.

Compliance items the underwriter will ask about

• Anti-money laundering program: federal rules under the Bank Secrecy Act require dealers in precious metals, stones and jewels above a purchase-and-sales threshold to maintain a written AML program with risk assessment, training and independent testing. If you meet the threshold, have the program in writing before you apply.
• Cash reporting: purchases involving more than $10,000 in cash trigger Form 8300 reporting. Card and ACH payments are not cash, but the underwriter will ask how you handle cash.
• California sales tax: the state exempts certain bulk sales of monetized bullion and coins above a dollar threshold; the threshold has changed over time, so check the current figure with the CDTFA and your accountant.
• Secondhand dealer rules: if you buy from the public, California requires reporting through the DOJ's secondhand dealer system in many cases. That is a state and local licensing matter, but it signals to an underwriter that you operate properly.

None of this is legal advice; confirm each item with counsel and your processor.

Cards: useful, but capped

Cards make sense for small orders, walk-in customers and buyers who value points. They do not make sense for a $30,000 order of gold bars, because interchange on that amount is a large cost against a thin bullion margin, and the buyer's bank retains the ability to charge it back for 120 days or more. Most dealers set a card limit (often a few thousand dollars) and require another method above it. On the card orders you do take:

1. Match billing and shipping addresses; refuse mismatches on new customers.
2. Require CVV and use address verification; consider 3-D Secure on online orders to shift fraud liability to the issuer.
3. Ship signature-required with full insurance and keep the tracking record as dispute evidence.
4. Post a clear market-loss policy for cancellations, with the buyer's acceptance recorded at checkout.

Keep the dispute ratio well below the network monitoring range of roughly 0.9 percent to 1 percent; with a small transaction count, one bad month can trip it. Real-time fraud detection with velocity rules is essential because stolen-card fraud on bullion is professional and fast.

ACH, wires and settlement timing

Above the card threshold, dealers rely on bank payment. Wires are same-day but cost the buyer a fee and involve manual confirmation. ACH payments cost a flat fee and settle in 1-3 business days, with a much narrower dispute window than cards; the standard practice is to lock the price at order and ship once the ACH has cleared. Cards settle in 1-2 business days. Because prices move, your terms should state when the price locks and what happens if payment fails.

Stablecoins for a Silicon Valley customer base

Silicon Valley has an unusually high share of buyers who already hold stablecoins. For a dealer, stablecoin payments settled on Solana or the XRP Ledger have two advantages: settlement is instant to the merchant wallet, and there is no chargeback mechanism, which matters for a product that can be resold the same afternoon. If your business also deals in digital assets beyond accepting payment, California's Digital Financial Assets Law imposes licensing requirements; check the current rule and confirm with counsel that accepting stablecoins as payment for goods does not put you in scope.

Reserves and cash flow

A new precious metals account will likely carry a rolling reserve on card volume. On a business that operates on small margins and high turnover, plan for it: keep card volume to the smaller orders where the reserve is manageable, and put large orders on methods that settle without one. Ask for a reserve review after a clean history.

Silicon Valley bullion and coin dealers can process cards, but the sustainable model is a capped card channel with tight fraud controls, ACH or wire for the large orders, stablecoins for the customers who prefer them, and a written compliance program that an underwriter can read. That structure keeps the account open when the spot price does something dramatic.