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Company Profile: L3 Payments

Bob Johnson

Any way you cut it, having an adult business is risky business. If it’s not concern over record keeping, it’s worrying about copyright infringement or how to keep a company afloat in times when nearly every type of porn is free for the taking.

But what’s even more important to the sole entrepreneur and huge corporation alike is getting paid for all of the trouble. And one company stands out as the go-to firm since 2003 for businesses seeking merchant accounts, ACH processing, risk management, billing support and overall consulting.

If there’s one major pitfall in the e-commerce arena today is consumer fraud.

L3 Payments LLC, the Westlake Village, Calif.-based company provides merchant processing solutions and consulting services through a network of domestic and international financial institutions with one goal in mind — to take care of companies that operate in high-risk industries.

High-risk companies that have been fined or terminated because of questionable ecommerce transactions like excessive charge backs and merchants that have non-traditional business models are welcome with open arms at L3 — a welcome haven for transaction processing-weary adult pros.

A nerve-racking business model? For sure, but also a welcome ally for companies in need that are seeking guidance and financial peace of mind. The company principals say they work with some of the top companies in adult that include consumer content providers, traffic providers and producers and pride themselves on servicing highrisk clients and more importantly, keeping them away from volatile regions and banks.

Founded by industry veteran Kjell Petridis, who was also founder of merchant processor giant Jettis Inc. and SBW gateway processing services, L3 offers full-service processing solutions as well consulting, merchant account processing and risk management.

In addition to Petridis, the top tier includes long-time Jettis associate and friend Hrag Kopooshian and Melody Lashmar — all of whom are dedicated to a personal touch for companies that normally think they’re left out in the cold.

“L3 Payments pays close attention to detail around the health of the merchant account and ways to ensure the longevity of the account is most attractive to our clients. No one wants to have to go through the process of opening a new merchant account every few months, so L3’s expertise in maintaining accounts is a key differentiator,” says Petridis.

The company maintains its smooth continuity through a network of 10 domestic and global banking partners — the majority of which are in the U.S. L3 approaches merchant account set-ups based on the needs of each merchant and then builds a strategic payment strategy that allows them to bill confidently with their own accounts.

Petridis said there’s no need to have a payments expert on staff when working with L3 because each plan is fine-tuned specifically to each client.

What makes the company different from other processors boils down to a few company principles with the cornerstone being the addition of more banks to the adult industry.

The firm also prides itself on allowing clients to have direct relationships with banks and not touching the client’s money (merchants are funded directly by the banks). L3’s also firm on not getting involved in credit decisions, however it notes that it is adept at packaging deals in a way that “gets clients approved in a timely manner.”

“We also have skilled technical personnel to assist with integration and help our client’s technical team evaluate and implement payment solutions,” Petridis notes.

If there’s one major pitfall in the e-commerce arena today is consumer fraud. L3 explains that fraud comes in two well known forms: “friendly fraud,” where a person fraudulently uses the payment information of someone he knows for online purchases; and “liar buyer” where the account holder themselves made the purchase and then calls claiming they didn’t make the purchase.

“L3 is continually attending payment events and meetings, conferences or tele-seminars to learn of new ways to uncover fraud and new ways to block it. We’ve also had a contract statistician who works with our analysts to identify new sources of fraud and develop new ways to combat them,” says Lashmar.

The executive came to L3 in 2009 from a U.S. bank, so her expertise is invaluable to the company and a fitting advocate for its clients being reprimanded by authorities for fraudulent transactions. Lashmar and her associates continually participate in industry councils and groups as the voice of the merchant.

As a consulting firm, L3 describes itself as being many things to many people. The company says it has been able to help merchants identify non-profitable and suspect products, partners, banks, consumers, regions, and card types by using the company’s data along with its own databases and expertise.

‘We’re also able to sit with the merchant and go through their history and business plan and help them tailor their offerings to be more suitable, allowing them to avoid processing pitfalls and undue scrutiny along the way,” Petridis said.

Add the uncertainty of the general economy and the particular roller coaster ride adult has faced in the last few years and the future of L3 appears bright considering the services it offers to challenged companies.

Often overlooked as more complex than it really is, this kind of “risk management” is essential and L3’s service in this area is one of its major advantages. The company explains that to maximize profitability, a business must of course attract customer interest and convert this interest into sales. But equally important, businesses must mitigate risk. “To do this, you must stay on top of credit card regulations, report charge-backs on a daily basis and monitor trends. At the end of the day, what matters is not just how much you earn, but how much of that you retain.

“We give clients the knowledge and the tools they need to stay in complete control of their receivables. This ensures compliance with ongoing communications that explain — in easy to understand language — the what’s and how’s of constantly evolving credit card regulations,” Petridis maintains

As part of its risk management services, L3 delivers real-time account reporting data that lets companies monitor performance and take immediate action with its management tools that include daily and monthly chargeback analysis and profitability-by-affiliate reports. It also goes a step further by working with gateway providers to adjust scrubs.

Petridis mantra is “Stay informed, monitor activity, diagnose issues and take immediate action.”

Because it has embraced the challenges of providing financial services to edgy companies for years — through good and bad times — L3 now has the experience to take a leap into the future, secure in the knowledge that it has the chops to help even the most needy adult business.

Petridis said that his firm is continuing to evaluate new technology and methodologies to improve upon the processing of payment transactions in the e-commerce space. The executive notes, “We are working with several entities and evaluating their services to see if we can improve upon the reduction in fraud that everyone desires. We have recently started the process of offering Secure Vault Payments from NACHA. This is a technology that allows consumers to make the payment directly from their online banking and allows the payment to be good funds and without question authorized by the consumer, eliminating the risk of returned items.”

With decades of combined experience and the courage to go where other processors fear to tread, L3 says it will continue to strive to be a leader in its field by offering its clients, “No risk, no hassles and no wasted time.”

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