Chris Mallick and Kanye West… I know what you’re thinking, but work with me for a second.
What could the founder of ePassporte and the chart-topping rapper possibly have in common? Both men are outspoken self-promoters who surround themselves with beautiful women and live the late-night lifestyle, but they travel in close-knit circles. Coincidences, perhaps, but consider their similar career paths: coming from upper-class families, becoming college dropouts, and fighting to survive until forging a path to notoriety and fortune.
Growing up in Texas and New York, Mallick began working at age 13. His family was in the oil business, but after dropping out of NYU, Mallick dabbled in various careers—finance, investment banking, nightclubs, and the Internet, finding his home in the adult industry after working in transaction processing.
In August 1999, Mallick joined Epoch and helped transform it into the trusted company it is today. In 2001, he founded ePassporte with his Epoch partners, Clay Andrews and Joel Hall, and launched the company in 2003. In February 2005, Mallick abruptly left Epoch, and in July – as part of a settlement – he was given the keys to ePassporte; Andrews and Hall kept Epoch.
Mallick is philosophical about it: He’s learned a lesson and emerged from the fray wiser and more mature.
In the words of West: “Now all I know/I know all these things.”
What was the impetus behind ePassporte?
The original idea was to develop an alternative payment method for the adult online industry that was not dependent upon Visa or MasterCard. We’ve always believed that credit cards and the Internet are not a very good fit. It just seems to be the method that the people who designed e-commerce chose to utilize available payment methods. That’s been very successful, but the truth is, if those things were such a good fit, then the rules that credit card companies impose on the adult industry wouldn’t be so strict.
Was ePassporte initially used to keep adult companies below the chargeback threshold?
No, and I don’t know where these things come from. The chargeback threshold has been consistently reduced for years to where it is now, 1 percent. The companies that have been able to stay below 1 percent did that prior to ePassporte.
What’s the craziest thing you’ve ever done?
Oh, Jesus [laughs]. I owned a disco in 1980. I was in the nightclub business for many years. Back then, you didn’t worry. We didn’t know any better, I guess, and there was a lot more action at every level. Picture scenes out of 54, Blow, and Scarface, and imagine me in any one of those settings.
Your thoughts on being called one of the most generous people in the business?
I think that’s because of the way I was raised. Also, I remember what it’s like to be broke. I’ve been broke in the past and hopefully won’t ever go through that again. I remember what it’s like not to get what you need when you need it. I’ve tried to be generous in all things – with my children, my friends, my associates, my staff – and I don’t expect anything in return. I take pride in that. It’s a private thing for me, but it’s nice to know people think of me that way.
You’ve been credited with building Epoch up to its current status. Agree or disagree?
I think I had something to do with that. The company was there when I arrived and it had good bones, so to speak. I think I brought something necessary to the table: organizational, financial, and marketing skills. I simply added to a great core staff, built up around that, and promoted from within. I think I put a face on the business. Building that company was due to the efforts of many; I was just the face. It’s almost like giving Col. Sanders credit for having great chicken—put my face on the bucket and send me around. I arrived at Paycom at a very tough time, and the difference from when I arrived and when I left was pretty dramatic.
What really happened with the split?
After six years of partnership I had other interests and things I wanted to do; my partners had different things they wanted to do. These are personal and professional things from all three of us. We decided the most intelligent thing to do was for each of us to take what he started and then go our separate ways. We had a lot of business interests, so it was a very complex transaction, but it was amicable.
But you apparently didn’t leave on great terms.
I think that’s my failure, in part because I didn’t communicate very well—but I didn’t do that because there were so many moving parts to the deal. It was difficult, especially with lawyers in a room trying to divvy up the interests of three entrepreneurs. There’s bound to be conflict, so the less public discussion about what we were doing, the better. We negotiated things. I think we all saw it as a business transaction, and as soon as people started taking things personally, things went awry. Those moments were expected, but they were infrequent.
How was the split on a personal level?
I was torn in some ways because I don’t do anything that I don’t take ownership and pride in—regardless of the fact that Paycom was there when I arrived, the company was there, and the team was together as a result of my and my partners’ work. I had a lot of really close personal ties to Paycom. Leaving that was not as easy as I would have thought. You try to keep everything on a business basis, but there are many personal elements to it. There were moments when I had feelings of loss, separation, anxiety.
What did you learn from Epoch?
I learned about myself. You can immerse yourself in your work and have the most successful business and the greatest business story to tell, but your personal story is a bit sad after several years. This business took total immersion in my view, and that’s the way I ran it. Life needs to be more about balance between personal goals and business goals. Those things can coexist.
Your thoughts on Epoch’s dropping ePassporte as a payment method?
I keep hearing that Paycom has dropped ePassporte, but I keep seeing transactions. I’m not sure how their business model is developing at Paycom. I’m not sure what they’ve changed and they haven’t explained to me why they would discontinue using ePassporte. I’m sure they have their reasons, but I haven’t talked to them about it. It’s sad to say that it wasn’t a very large volume account, but we hate to lose anyone, particularly a company we started with.
How do you stay focused with such a good-looking staff?
[Laughs] Everyone always focuses on our having beautiful women around. Most of the staff is an integral part of my business, from my executive assistant to my accounting manager to my marketing and sales people. It’s not personal. I think that’s a misconception. People call them my entourage, but they’re actually on payroll because they perform the job they were hired to perform. We’re fortunate to have people who are very dedicated and we’re extremely fortunate that some of those people are extremely attractive.
Who have you learned the most from in this business?
David Van der Poel. David understands content, databases, finance, structure of an organization, and he understands marketing almost better than anyone. In terms of A to Z in the adult online business, he’s sort of my go-to person and I respect his judgment because he has such a wide scope of knowledge.
Does the industry need to worry about Visa anymore?
The industry is in its best shape ever with Visa and MasterCard. I hear the associations are happy with the IPSP model. The processors are registered now (CCBill, Paycom, 365Billing), they’re large U.S. banks, and they’re following the rules, which won’t be loosened, but will probably won’t be tightened, either.
What’s next for you?
I’m focused on developing ePassporte in a lot of markets and achieving the goals we discussed. I’m at the point in my life where I’ve been working full-time for 30 years and I’m looking to slow down a little—not in terms of marketing and the shows, because I enjoy that, but I’m going to back off from the day-to-day and focus on the bigger picture.
Finally, if you were ever to appear on the cover of Forbes, what would you want the headline to read?
“ePassporte: America’s Currency.”
