Some Background I run a small business where my customers need to have merchant accounts. For awhile now, we have struggled with figuring out how to help new customers turn on a new merchant account in a way that is easy, straightforward and managed by us. There are two reasons we want to be involved in the process: a) We can help each customer through the complicated application process so as to keep new customers without them leaving out of frustration. b) Some of the fees that the customer pays for their merchant account is returned to us for referring them. By doing this, we are able to offer lower monthly prices on our other products. Enter Cornerstone Payment Systems A year ago, someone by the name of Nick Logan called me out of the blue and introduced himself as a “Christian payment processing company”. Nick found our company through a like-minded (Christian) affiliation and spent several minutes convincing me how strong his Christianity was. He not only claimed to be pro-life and pro-marriage, but stated that he “did not do business” with anyone that took an opposite position. Nick is a convincing guy. He’s well-spoken and charismatic. I was a bit uncomfortable with the severity of his position (I am prolife also but do not believe in boycotting businesses simply because they take a different position) but moved on in the conversation to fees and commissions. I didn’t care what his Biblical views were; I was just about the business value. Here were (and still are) the specific items that concerned us with respect to business value: a) Are Cornerstone’s fees low for my customers? b) Is Cornerstone’s gateway fast and reliable? (Hopefully, an industry standard) c) Could I earn enough commission to make it worth while? Nick promised the best in every area. His fees were very low – no setup, annual or gateway fees whatsoever. His gateway is Sage Payments – one of the industry leaders. And the commission was fantastic – I could name a monthly statement/support fee (say $30) for my customers, almost all of which was passed back to us. I also received half of all transaction revenue. It sounded too good to be true. Other vendors I had worked with had much lower commission. The monthly statement/support fee was split in half at best. And their gateways mostly consisted of custom applications, built by the vendor themselves, used by a few hundred customers at most. Nick and I exchanged a contract, tweaked a few things, and then signed. The contract laid out everything he agreed to verbally and I saw nothing in his background that was suspicious. From what I could tell, he had spent 15-20 years in the industry, mostly working at large financial companies before starting his own thing. For awhile, he ran the now-defunct Cornerstone Bancard that sold prepaid debit cards. For a few years, Cornerstone Bancard owned the rights to the Hula Bowl wherein Nick made the same Christian overtures he had made with me. He is on the board or has spoken at numerous Bible conferences, events and associations. But I was skeptical. Nick’s Christian rhetoric was fine – I had seen that from others and wasn’t bothered by it. What bothered me, from the very beginning, was his lack of management, zero attention to detail and zero sense of urgency. The only thing that seemed to matter was signing me up and getting me to send them new applications. He forget nearly everything I asked for barely a day after we had discussed it by phone. Specific things I asked for – and he agreed to – were dropped immediately. At the beginning, they were small. For instance, I asked that our customers’ applications be auto-filled with the data we passed to Cornerstone so they wouldn’t have to complete the process twice. This was causing a lot of customers to either delay or entirely drop their new account. On the phone, Nick said it was no problem. In his usual charismatic reassuring way, he said that “they understood the request and would handle it immediately”. But then the very next application that was fulfilled – nothing. No data was entered. None of the items we asked for were in place. Or take our referral code even… When new applications are processed, the application is supposed to have our name on them so that we get credit. But several applications had it missing. Over the course of the first month, dozens of clerical mistakes piled up. I was frustrated but kept my shirt on. After all, this was a good deal if only I could keep Cornerstone fulfilling their end of the deal. I figured that it was just a small company that was overwhelmed. Nick talks about his family life – his 9 kids – extensively. Having had a lot of experience with large families, I knew what that meant: family first, business second (or not at all). Then the mistakes started getting bigger. Not only were applications not being done right, they weren’t being done at all. Two applications were missed in the course of several days. Read that – two of our customers submitted applications and then waited while no one responded. I suddenly noticed that in 4 months, we had not received one bit of revenue. Cornerstone never sent us any payments. We had only sent a few new accounts to Cornerstore, but where was our commission? Each account generated, at a minimum, about $35 per month in commission for us. We had received nothing. No letters, no emails or account statements and no payments. I contacted Nick relentlessly throughout this process. In fact, I contacted him by email or phone several times per day for a period of 2 weeks. He never answered and his employees kept telling me he was busy. He was either out of the office or “in a meeting” for almost a month before I finally got him on the phone. As usual he was warm and reassuring. Things were fine. In fact, he said he thought that “we had decided to work with someone else” because they hadn’t seen much interaction from us. This blew my mind. Why would it make any difference how many applications we sent? Where was my commission?! My developers had invested a lot of time in integrating with their system. In the first month and a half we began working with Cornerstone, I had two employees working full time on nothing but this partnership. And we had a signed contract. Payments for all commission were to be paid every 30 days. I read and re-read the payments clause trying to find if there was a loophole I was missing. It may have only been a few hundred dollars in revenue, but I was relying on Cornerstone for much bigger plans. These few applications were to test the system and see how much revenue they made, as an indicator of things to come. See, at the same time this was going on, I was planning a $100,000 internet marketing campaign targeting a hundred new customers per month. Most of those new customers would need merchant accounts, all of which would be handled by Cornerstone. After it became clear that we couldn’t get Nick to pay us what he owed or even respond, I put all marketing on hold. In the last phone call, he said he would provide us with a login to his “CMX” software which would give us transparency into new accounts, a reporting account which would show us our current customers and what they generated and he would “create an ACH” for a payment. It was easy, it was no problem, it was…. Never to come. A month later, I had received nothing. My attempts to get him back on the phone were useless. His employees (who by the way are his family members) ran me around in circles, always stating that I needed to talk to him. We began the long and painful process of unwinding our business processes from Cornerstone and looking elsewhere for a solution. The Christianity of Cornerstone Payment Systems As a fellow Christian, I am filled with embarrassment and shame that people like Nick Logan exist. Nick’s mismanagement, empty promises and flagrant deceit, coming on the heals of an aggressively-promoted testimony, shapes the ‘Christian huckster’ persona that so many non-believers love to promote. One of my employees is an ardent atheist and he took great joy in pointing this out. Whatever you do – whatever you are promised or hope to believe – do not do business with Nick Logan or Cornerstone Payment Systems. They aren’t worth it.