Epoch Transaction Services (www.epochsystems.com) isn't a small operation. Employing 180 people in Marina del Rey, Calif., it's one of the largest adult Internet industry processors out there. However, "bigger" doesn't mean anything but "better" to Epoch's team of leaders: Clay Andrews, president; Chris Mallick, CEO; and Joel Hall, CTO.
As Mallick says, "We're tightly run and operated, responsive, and very focused on the adult Internet community."
Andrews provides a little history: "Epoch Transaction Services formed as a corporation in 1996; [Hall] and myself were the primary founders.
"There were a couple of other people involved... we got into the Internet back in '94, '95, and we saw a need for a better online payment system. Back in 1996 there were very few real-time credit card processing solutions. We were using one that just wasn't working correctly. There were a lot of deficiencies - it was slow, there wasn't online reporting, it was difficult to cancel members - and Joel, the visionary, the designer, was able to look at this and see where we could make improvements."
"I came from the viewpoint of the merchant and the Webmaster," Hall adds, "because I'd done consulting for a lot of these people. I knew their pain and problems. I could see what would be value-added features that they may have wanted, but didn't have."
Excited about the things they wanted to do better than other providers at the time, Epoch grew into processing quickly - but processing only, paying attention to attuning their services to Webmaster needs, and streamlining their infrastructure to stave off an explosion of new-industry-cash-cow fat.
"From an adult Webmaster's perspective," Mallick says, "we're not a hosting company and a processing company; we're not a public company that may at some point have to turn its back on this community. We're not a company that's out there courting 'big, mainstream' clients.
"Epoch itself is 100 percent adult. It's by far and away the largest segment of our business. We're in all respects completely dedicated to the adult Webmaster. That's what started us, that's what sustains us, and that's where we think the future is."
Andrews addresses one of the Epoch differences. "We enable the Webmaster to have more flexibility in the billing models s/he's allowed to provide to the cardholders; also, we provide a lot of tools that help Webmasters maximize the retention of customers in trial conversions. We've also released new financial reporting that's very in-depth, graphical interfaces, the whole thing."
He also emphasizes throughput as an Epoch strength. "The number of cards we allow to go through - of course we have to scrub our transactions in order to maintain the guidelines - but we believe we have the best throughput and lower credit chargebacks. Not only are we allowing [Webmasters] to keep a lot of people, we're letting a lot of people through the front door."
"One of the primary things we want Webmasters to know," Mallick says, "as far as 'business wisdom' or 'experience': It's difficult and very expensive to get business in the door. [Webmasters are] paying a lot of money to bring eyeballs and joins to their sites. Once they do that, we think it's our responsibility to do everything we can to retain the money that's generated from the sales they're bringing in.
"We'd like Webmasters to really look at chargeback ratios, credit ratios; how much money are they giving back? It's not just about throughput and conversions; it's about retention. If your credit rate is over two or three percent, you're giving away a lot of money. If your chargeback rate is over the card association guidelines, you're putting yourself at risk. Don't just look at how much water is going over the waterfall; look at how much you're actually keeping."
Mallick laughs a little self-consciously, because we all know what he's going to say next. That doesn't make it any less true: "Take a long-term view in all respects in this business. When people got started, it was fast money; but this is a real industry, and it's matured. We see a lot of Webmasters maturing and looking at this in a long-term fashion. We want to encourage them and others to [continue]."
The company prides itself on adapting to changes on the outside and promoting changes on the inside.
"I think that the industry's dynamic," Andrews says, "in that we have to deal with a lot of issues with outside forces that we don't necessarily have control over.
"We feel we've got very good relationships with the card associations, which is important in that we're not guessing at what's going to happen. We typically know which changes are coming and when they're going to take effect.
"Having these good relationships helps us anticipate what we need to do within our organization to adapt to changes and keep our portfolio and our Webmasters out of harm's way."
Epoch's inner workings have also adapted, according to Hall. "We have an infrastructure that's evolved over the years. We don't have a lot of bureaucracy here. If we get a report that new features are needed or we need to respond to new rules, we do it quickly; we're hands-on and we get things done fast, from a technical perspective."
This inner stability, Andrews says, allows the company to "branch out, develop all of these new features."
Epoch has created several unique products for Webmasters, offering them exclusively, by themselves or in a suite. For instance, "EzClick" lets Epoch Webmasters market directly among one another; "Member Plus" lets them market to existing members. "Purchase Plus" allows Webmasters to sell up to three products from a join form, creating potential up-sells to their own sites or the selling of traffic to other sites from the same form. "Approval Plus" provides Webmasters the ability to sell an additional product after an approved sign-up. Each product works without a resubmission of the card number, and they're available to Epoch clients at no charge.
The company also offers Webmasters numerous ways of creating their own payment interfaces - more than anyone else, according to the site. They have created "easily-integrated 'Smart Forms' for credit card and ACH transactions [which] can be customized with your colors and graphics and allow information to be passed through our system and returned to your server," describes the site.
In addition to in-house 24/7 customer and technical support, the company provides risk management and fraud control, set-up without fees or a required merchant account, commissions for referring clients, quick and easy integration with the Webmaster's site, weekly payments by check, wire, or UPS, multi-language payment forms and receipts, and a zero-reserves program, among other features.
Mallick admits it's "shameless self-promotion, but it's fair to say that if you look at the big guys, the ones who have big infrastructures and long-term views, who have been around and are going to be around, we're the primary processor for them. And there's a reason for that. Yeah, we're tougher on some things; but they understand we help them keep more of their money."