Disclosure - I am the Founder/CEO at Cozy
This has been a tough few days for many landlords, and we understand your fears, concerns, and frustrations. Thank you to those of you asking about our methods. Let me share why we believe landlords and renters using Cozy will not experience a similar result to the recent event.
First, and perhaps most importantly, we work with Stripe for payment processing. Stripe operates in 25 countries, and they’re a company clearly set up for the long term. Stripe is a $9 Billion company and is widely regarded as a trusted payment processor. Stripe handles payments for tons of awesome companies, including, coincidentally, BiggerPockets.
While we have many internal safeguards that I’ll talk about in a second, understand that Cozy never takes custody of your funds during a payment transaction. Our processing partner Stripe is a licensed money transmitter, and moves your money on our behalf. Funds travel from renters’ bank accounts and credit cards and are deposited in landlords’ bank accounts via the ACH system. Cozy has no access to your money while it’s in transit.
eRentPayment in a recent statement said the following:
“We regret to inform you that our payment processor, eCheckit, has informed us that it expects to file for bankruptcy protection shortly. We are told that it suffered losses due to a fraud and that its processor, Check Commerce, has held over $4 million of its funds and will not release the funds to the intended recipients at this time.”
We believe it to be extremely unlikely that Stripe will experience an issue like this. Their underpinnings are built with Wells Fargo, which is the fourth largest bank in the United States.
Of course, this is not the only issue that may affect your security when processing rent payments, so we have additional buffers in place to add additional security:
1) Our Trust & Safety team ensures that every single Cozy payment goes through several layers of fraud detection. These include internal proprietary software, external partners such as Sift Science, and humans at Cozy.
2) We employ a rigorous software development process. Every code change is backed with automated tests and reviewed by at least two engineers. Cozy has to work reliably. We understand how costly bugs can be, like when Knight Capital lost $441 million in 45 minutes.
3) We keep our infrastructure up to date, which ensures that we receive security updates as soon as possible. The recent Equifax breach was a result of a security update that took months to apply. Similar updates to Cozy’s environment are applied in days, or even the same day, for critical vulnerabilities.
4) We actively and voluntarily pursue data security. Cozy is voluntarily compliant with PCI DSS, even though we do not store your credit card information. (It’s in Stripe, so why also store it on Cozy?) PCI DSS is one of the most stringent organizational security standards in financial technology. We hire third-party security specialists to perform yearly audits. For example, the leak of credit card information at Home Depot in 2014 was due to insufficient PCI DSS compliance.