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Leaders In Payments
Leaders In Payments
Farooq Malik, Co-Founder & CEO of Rain | Episode 462
Money is changing faster than most teams can update a roadmap. We sit down with Farooq Malik, Co-Founder and CEO of Rain, to unpack how stablecoins and tokenized dollars are moving from crypto headlines to the hidden plumbing of real payments - powering card programs, cross-border payouts, and embedded finance at enterprise scale.
Farooq breaks down Rain’s vertically integrated stack: pay-ins and payouts across ACH, wires, and Visa; support for dozens of stablecoins on 11 blockchains; and account logic that makes tokenized value feel like a familiar account, not a science project. We dig into a standout use case - a margin-backed credit card where each swipe triggers instant receivable financing in stablecoin - cutting working capital needs by about 80% and transforming the unit economics of card programs. He also shares how one API can issue regulatorily compliant products in multiple markets, letting global platforms pay creators, freelancers, and merchants in “international dollars” without stitching together country-by-country integrations.
We explore the surge in institutional interest fueled by emerging regulatory clarity, the 30x volume growth Rain has seen in the last 12 months, and why broader rules could unlock 10x–100x adoption across the ecosystem. Farooq contrasts Rain’s approach with reseller patchworks, highlighting the benefits of being a principal Visa member and owning the core of the stablecoin stack. Beyond stablecoins, we touch on open banking, the rise of global-first consumer apps, and how nomadic work patterns are forcing finance to follow people, not addresses.
If you lead payments, product, or finance, you’ll leave with a clear view of where tokenized money creates immediate value: better card economics, faster global disbursements, and simpler enterprise integrations.
Welcome to the Leaders in Payments Podcast, where we talk to sea-level leaders from across the payments landscape. We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments. We will also hear stories from our guests about their journeys to the topic.
SPEAKER_02:Hello, everyone, and welcome to the Leaders in Payments Podcast. I'm your host, Greg Myers, and today's special guest is Farouk Malik, the co-founder and CEO of Rain. So, Farouk, thank you so much for being here and welcome to the show.
SPEAKER_01:Thank you for having me, Greg.
SPEAKER_02:So before we dive into your career and the company, do you mind giving us a quick snapshot of your personal background, maybe where you grew up, where you call home today, a few things like that?
SPEAKER_01:Yeah, yeah. I grew up in Virginia outside of Washington, D.C., went to undergrad at the University of Texas, went to grad school in the United Kingdom. And uh these days, yeah, I just recently moved to New York City with the family.
SPEAKER_02:Okay, great. So can you walk us through your professional journey, maybe how and why you started the company?
SPEAKER_01:Yeah. I mean, I've spent most of my career in financial services and private equity. And I decided sort of partway through my career in sort of the late 2010s to go off on my own at a startup. And I met my co-founder kind of through that journey of like exploring various ideas. And from there, we decided to just get started building just a side project together, focusing on automating fundraising for startups and angel investors. And from there, that's how we actually discovered the opportunity of what was happening with the tokenized money ecosystem, stable coins, et cetera. And that's how we started RAIN, kind of through sort of happenstance of wanting to be building a startup.
SPEAKER_02:Okay. All right. Well, let's dive deep into rain. So first tell our audience what rain does. And then you guys had kind of a big announcement last week. So we'd love for you to touch on that as well. But I think first just tell us what rain does and we'll go from there.
SPEAKER_01:Yeah, RAIN is a stablecoin infrastructure company. We're focused on making stable coins usable and accessible for any payments use case around the world. We provide end-to-end payments infrastructure. So everything from pay-in, accounts, payouts on a variety of different rails, legacy rails like ACH and Wire, as well as card payment rails on the Visa Network.
SPEAKER_02:Okay. And if you can, whatever you can tell us about the announcement from last week?
SPEAKER_01:Yeah, we announced that we raised a$250 million Series C led by Iconic and joined by a lot of our existing investors and a handful of new investors. The money is really so that we can continue expanding globally. We are currently a single integration point to service a multi-regional market for our customers. We use stablecoins as the store of value and as the medium of exchange for a global customer base. And with the new resources, we're really excited about exploring additional licensing around the world so that we can continue expanding the addressable universe that we allow our customers to operate in.
SPEAKER_02:Okay. So who's a typical customer and what's a typical use case?
SPEAKER_01:So we've been very fortunate over the last sort of four years to power a variety of different use cases. So we have use cases that on the face of it are very noticeably stablecoin-based, right? So stablecoin neobanks that are using USDC or other stable coins as a store of value, as a replacement of the deposit account. We power programs that are self-custodial. We also program, manage programs for institutions that are on the institutional custody side of things. And then we also do a number of programs that are, if you were to look at them, you would be hard pressed to figure out where the stable coins are and the flow. And for us, those are the really exciting ones because our thesis is that stable coins, tokenized money, CBDCs, bank deposits, et cetera, these are just the natural evolution of money. And as institutional adoption grows, we are learning and exploring new types of opportunities to embed non-fungible money into the back-end rails. So one of the use cases we enable today, and we do this for a number of players, is a high net worth credit card product where it's a margin-backed credit line. And that margin-backed credit line is against your assets that are held at an institutional custodian or broker dealer. And whenever the card is swiped by the cardholder, there's a receivable financing done against your margin automatically in stablecoin. So we're borrowing from capital markets players for that individual dollar or$5 for a cup of coffee. And then we're sending that to the card payment network, and that receivable is automatically securitized into that credit facility. And so the way that this would have normally been done previously is that you would have warehoused single swipes over a period of time, whether it's a week or two weeks or a month, and then you would have had to manually sell those down into a warehouse credit partner. Whereas in our case, the moment that the card is swiped, we can actually originate the receivable for$5 payment from the capital partner directly and then fund those funds directly to the merchant. And the working capital required now is about 80% less than it would be for a traditional program.
SPEAKER_02:Okay. Well, what's the biggest challenge that your company is solving for your customers right now?
SPEAKER_01:I think the biggest challenge for us that many of our partners come to us for is that if you look at the last decade or two decades of sort of economic development, especially in tech or marketplaces or e-commerce, we can see that companies have taken the opportunity of the pandemic to go global, right? Before that, we had this like wave of globalization where companies started building platforms to service people around the world. If you look at Airbnb, you look at this massive explosion of gig economy marketplaces where people from one place can contract for jobs in another place. There's this massive explosion of global businesses. Now, all of those global businesses, the currency of commerce on these platforms is dollars, right? So if you're a Bangladeshi freelancer, you're earning for graphic design from a US company, you're earning in dollars, and then you're receiving those funds back in Bangladesh or Indonesia or whatever it is. And the biggest challenge has been that there's been no way to actually provide embedded finance or financial services products for these global platforms. Now, if you look at somebody's, you know, like Uber, they have driver for like card products in the United States, but for them to expand that around the world is very complicated. And it would require them to go country by country by country, integration by integration by integration. For Rain, what we do as for our partners, we actually let you have one single API where you can actually issue product into multiple markets in a regulatorily compliant way. Right. And the stable coin that we utilize in the back end is essentially an international dollar product that lets you hold value or store value or service users that can't hold US dollars in local markets with a US dollar account that now any platform or marketplace can actually disperse funds to and give those funds, those people that are earning dollars the ability to hold dollars.
SPEAKER_02:Okay. So is most of this cross-border? I mean, is that the use case or kind of the where you add the most value, so to speak?
SPEAKER_01:I think for us, like I would argue that 80% working capital reduction for any card program is a pretty massive value improvement. Whether it's a domestic program, whether it's an international program, that's a pretty massive seed change in how you operate a program. And that can make the difference between making something profitable versus unprofitable. Right. And so for us, we've been very conscious of the fact that like stablecoin, stablecoin infrastructure is very new. And so one of our overarching principles as a company has been how can we enable proactively and proactively reach out to use cases that where it's not intuitive that stable coins can add value, right? And so we've tried to find as many different individual use cases with partners and bring them to market so that we can be in each individual use case, whether it's a massive industry segment, whether it's not, whether it's an emerging industry segment, or whether it's a traditional emerging or traditionally serviced segment and provide services so that we can build an area of expertise in each individual vertical so that we can demonstrate that as more institutions come to market, hey, how does stable coins impact me in payroll? We actually have tangible evidence to point to and say, hey, in payroll, we've seen improvements that can do this, this, and this. In you know, platform disbursements, we can do this, this, and this. In international remittances, we've seen improvements of this, this, and this. And so for us, it's been really important to be fairly wide in our initial market selection for our customers. Because as it's a new market, it's really important to understand not only where can stable coins and payment infrastructure that we enable provide the most value today, but what are all of the interesting new use cases that you can then build because money is now tokenized, because it's programmable, because it requires less working capital? What are the things that you couldn't do previously that you can now build because the cost of building is cheaper, the addressable market is larger, the time to market is faster?
SPEAKER_02:Okay. So what would you say differentiates Rain from your competitors? Which your competitors could be other companies doing similar things, or it could be kind of the old way of doing business, right? To me, that's that's maybe what you're up against a lot of times is we always used to do it this way, but here's this better way, right? So what differentiates you from others out there?
SPEAKER_01:So we've spent the last several years building our own blockchain infrastructure stack. That on its own is very complicated and difficult to do, right? On top of that, we've built that across 11 different blockchains today. We're adding about one new blockchain every quarter as customer demand comes in. We support dozens of stable coins natively so that you don't have to worry about which token your customer is in. If you're a large institution, you're exploring, issuing your own stablecoin. Our infrastructure is flexible enough to support you with our use cases, whether or not you're using your own stable coin or whether you're using one which is issued by a regulated third party. We've actually spent the time and resources building and moving volume on every individual piece of our stack. And that's really what ends up differentiating us the most. Because let's say if you're a new entrant, you're entering the market, you are most likely going to enter the market at like the least differentiated part of the stack where it's a traditional financial services product, and then you're adding the ability to go into fiat with stable coins, or vice versa. But that product on its own is not really where the utility is, as far as we've seen, because we're kind of now several years ahead of where the first market entrance will be entering. And we've been able to iterate and grow and understand and learn where individual or like customer demand is coming from or enterprise demand is coming from, and then move our product and our core competencies to start servicing those markets. So I think for us, the value is that we're a principal member of Visa on our own, that is the same level as any other financial institution would be. We have a vertically integrated stack that gives you cost savings and efficiency of going to market. And anybody else in the market is really going to be reselling a different batch of different services to you. And we're glad that people are exploring this and want to come into the market. We think that a broader universe of people that are interfacing with stable coins is, you know, writ large, very good for both us as well as the broader market. And so for us, like we we're really excited about all of the innovation that's going to happen in the market, whether it's done by us or by others.
SPEAKER_02:Okay. Well, let's talk about the future a little bit. Where do you see the biggest growth opportunity for your company?
SPEAKER_01:I think the biggest growth opportunity, I mean, we're seeing massive growth just in the last 12 months, right? Like our payment volume has grown by 30x just in the last 12 months. We credit a lot of that to regulatory clarity, right? And if you look at regulatory clarity, you know, the Genius Act was passed, it has yet to be implemented, right? Market structure for DeFi, crypto, stable coins, et cetera, is still being negotiated in Congress. And so we're still very early in where the regulatory clarity will eventually come in. And our view is that as more safeguards get built into the system, larger and larger institutions will see this as a credible pathway to build new types of products and services. And that's where we think massive adoption will come from. So, like just in the small delta between complete sort of gray area to now some amount of regulatory clarity, we've seen a massive 30x growth curve, right? Now, if the actual bill is implemented, we expect that to be maybe 100x growth will happen across the ecosystem, right? Like as more and more people realize that, hey, this is not only new technology, but it's new technology that's here to stay. It's new technology that everybody is going to ultimately have to implement. It creates this massive vortex of growth that will eventually start growing.
SPEAKER_02:Okay. Well, what does success look like for your company, say, in the next three to five years?
SPEAKER_01:I think for us, it's really about maintaining and growing our customer relationships. Like at the end of the day, we're an infrastructure player, and it's really important for us to continue building trust with those that we serve and continue servicing them with better and better products and services, right? And so for us, it's just about expanding the footprint of services that we can offer to our customers. We have a lot of customers that come to us and say, hey, I use vendor A for service X. Can I switch service X to rain? Because we really appreciate you. We like your service, we like your team, we like the reliability. And so for us, it's been very fortunate. We've been very fortunate to be in a position where we have that level of trust with our customers. And success for us is really about continuing to grow not only that suite of services that we can offer to our customers, but also seeing them continue to grow. Like our value add and our value proposition to our customers is that, you know, we're here to serve you as long as you're making money. Right. Like our primary objective for our customers is to build better products that give them better unit economics. And so ultimately they can drive net revenue higher. And so that's really the shining star for our sales strategy. And for us, success is really when our customers grow, we grow when they grow. Like that's really what it's about.
SPEAKER_02:Right, right. So you said a couple of things there. I want to double-click on. You talked about Rain being an infrastructure company. And then you also talked about companies coming to you and they want to switch or they want to change. I mean, we know from being in the payments industry a long time, switching vendors or technologies is a challenge. So, sort of, how do you talk to customers about that and come overcome some of those challenges that companies have when they want to switch providers?
SPEAKER_01:Yeah, I think we've been very fortunate that because again, the industry itself is very new, right? Institutional quality of counterparties that you're engaging with in the industry is also very new. Many of the players that people are working with, whether they're enterprises or early entrants, all of those integrations are very new. And so we're kind of in this sweet spot right now where there's probably going to be a great deal of switching, largely because institutions that start with one integration to validate product demand will naturally want to upgrade to better quality partners so that they can do more with a single MSA, right? I mean, we've seen this in every other industry where if you are able to offer multiple services, your clients will just end up buying more services that you offer. I mean, if you look at Microsoft, for example, right? Like people that are in the Microsoft ecosystem, they just use all of the Microsoft ecosystem apps. And before they built those apps, there was a massive variability in all the different verticals and apps that people had. And what we've seen, what we see emerging in stablecoins is that larger enterprises want a turnkey solution. They understand that this is a new technology. This is something that is individually, each layer of it is complicated on its own. And then implementing it all one by one by one and making sure all the plea pieces plug together is actually even more exponentially complicated. And so that's where we see a lot of value is that because we provide the heartbeat of the stablecoin stack, we provide the account infrastructure, the account logic, the authorization mechanisms, we provide the ability to go out to a card payment product or disperse into your local bank account. That ends up being the core. And then all the ways in and out of that core, that's where we can expand our footprint.
SPEAKER_02:Okay. Well, we're obviously talking about one of the biggest trends in payments, biggest trends that you know I've probably seen in my career is certainly this whole stable coins and crypto and blockchain. But what other trends do you see in the industry? What are some of the big trends that that you see beyond just this?
SPEAKER_01:We're at a really interesting moment in the market, Greg. There is so much innovation happening in the market that each individual service line here is really interesting, right? Like you look at agenda commerce, there's a lot of activity on agenda commerce. You look at open banking even, right? There's massive innovation happening on the open banking side, whether domestically or internationally. There's a lot of countries now regulating open banking access, information access, and you can have whatever view you want, whether it's positive or negative, but the reality is that there's activity, right? And when there's activity, these are things that you always have to pay attention to, whether you're a business person or you're a bank or you're a regulator, you have to figure out like what are the individual trends. The other thing that we're really excited about seeing, right, is there's this explosion of the global app. We now live in a world where people, because of like nomadic work, because of like remote work, people feel comfortable. Hey, you know, I'm gonna go spend six months here, and I'm gonna go spend three months there and three months somewhere else. And they're gonna keep the one job that they have during that whole time. And so as people become more global, as they travel more, as they move around more, there's new products and services that are emerging where the old ways really don't make any sense. If you look at a lot of the financial products that exist today, they're really very much tied to I live in city, you know, I live in whatever, San Antonio, Texas, and I operate in the local area, and now that's my addressable universe, and every financial product is built for that. So if you now travel from there to Guatemala, your bank is like, hey, this is fraud, this is this is high risk, right? And so like all of these tools need to be updated and changed because consumer behavior is changing, right? And so these are all like large trends that we see emerging in the market that are individually very interesting.
SPEAKER_02:Okay. Well, a couple final questions. So we're gonna pivot a little bit here. If you could go back and give yourself advice at the start of your career, what would that advice be?
SPEAKER_01:I think the biggest advice I would have given myself is be patient. I think for most founders or most people that are exploring ideas or business, a lot of times to be right, you have to wait around. Whether you see a trend emerging or not, a lot of times if you see a trend, it you may be one of very few people seeing a trend. And in order for that to actually coalesce and become a thing, you have to you have to take the time and wait to actually become a trend, right? And so that's been something that you know I've struggled with in my career where I've just been like, oh, you know, I'm I I want to do this and I'm gonna and I've done this in jobs too, right? Where And I'm sure lots of listeners uh to the podcast have also been like that when they were younger, where they're like, you know, I really want to provide value add, I want to make change, and I want to do it now. But a lot of times it's good to learn and observe and listen and understand and then act when the time is right. And that's probably my biggest advice I would give back to myself.
SPEAKER_02:Okay. No, I think I think that's great. You're you're very much like me. That's the way I've I've been most of my career. And definitely I think a lot of listeners will be that way. One final question. So what's the one thing that you want listeners to take away from this show? What should they be thinking about right now? What's the one thing about Rain you want them to kind of remember from this?
SPEAKER_01:The one thing I want people to remember from this is that whether we like it or not, the world is changing, right? Whether we agree, we disagree, the world is changing. And whether we make a plan to deal with that or we don't, the world is changing, right? And so we've seen this before when we transition from a cash economy to like checks, and then from checks to like electronic money. Tokenized money is the next generation and the next logical evolution of money because what it does, it has a lot of the elements of cash where it's non-fungible. So you don't need two dollars to spend a dollar like you do with electronic money. And that simple thing where we get to actually spend a dollar and it's one dollar that needs to be in the economy, can have massive impact on the entire ecosystem. It can have massive impact to the bottom line of companies, it can have massive impact to the economy of our country as well as other countries. And this is going to be something that every institution that interfaces with money or earns money or sends money or pays people is going to have to upgrade their systems to solve for. And RAIN is building that OS for tokenized money so that anybody that wants to interface with it or use it or have it operate for them or plug it in as an augmentation of their existing fiat money stack, they can come to us and say, hey, I do this individual business activity that involves sending or receiving money. How can I use RAIN's products and services to solve problems that will emerge over time? For us, that's really what we're really excited about, right? The emerging use cases of tokenized money, where it's going to fit, what people are going to do with it. We view this as very much like the early days of the internet, where the fact that we're talking today, having a you know a podcast that's going to be distributed globally, this concept was not like thought of when people were just chatting in chat chat rooms, right? And if you look at the industries that have been created on top of the technology of the internet, it wasn't intuitive that we would get here. And so my feedback to everybody or my commentary to everybody is that when you're thinking about tokenized money or stable coins or CBDCs or tokenized deposits, these are all different ways of call talking about the same thing, which is just money. And money is changing, and I would recommend everybody figure out what your plan is.
SPEAKER_02:Okay. Well, I think that was a great summary and a great way to wrap up the show. So, Farook, thank you so much for being here. I know your time is very valuable. So, again, thank you for being on the show today. Thank you so much, sir. Pleasure. Absolutely. And to all your listeners out there, I thank you for your time as well. And until the next story.
SPEAKER_00:Thank you for joining us this week on the Leaders in Payments Podcast. Make sure you visit our website at leadersinpayments.com, where you can subscribe to the show and where you'll find our show notes. If you enjoyed listening, please share on your social channels as well.