JD Durkin: Farooq Malik joins us now, the CEO of Rain, which provides tech that allows businesses to build payment products powered by stablecoins. A lot of stablecoin chatter here. [Unclear: “Mike”], thanks for chatting with us all about it.
Farooq Malik: Thank you.
JD Durkin: So much of our payment system was built many decades ago. Where does that system still fall short today, and what is the role of stablecoins in that new-look future?
Farooq Malik: Well, if you think about all of the technology improvements that have happened in, you know, just technical innovation, right? We used to send letters in the mail. Now we send text messages. We do video calls. That same technology can be applied to money movement. The current system is running on mainframes from decades ago.
And we’re moving to a tokenized money movement world, where money is non-fungible again, where I send it to you, you have my dollar. You don’t have my bank’s dollar, right? You don’t have your bank [unclear: “stolen”]. And so that increases the efficiency of all financial products and services, to reduce the cost of providing that to an end user. And we think that that technology improvement, and the corresponding reduction in cost, is going to be a huge advantage for the future of financial services.
JD Durkin: All right. So we’ve got stablecoins over here. We’ve got more traditional payments over here. In the near future, do you see stablecoins totally replacing the traditional way of going about payments, or a bit more complementary in the near term?
Farooq Malik: I wish we could say that it’s going to completely change things. The reality is that we still use coins, right? We still use coins and paper money. Most likely, technology changes are about adding on. It’s not about eliminating and replacing. So tokenized money is going to be something that every institution around the world, whether it’s a business or a bank or a securities broker, everybody’s going to have to figure out how they want to engage with. And there’s going to be nowhere to hide from it, the same way that anybody today that wants to transact has to deal with electronic payments. They have to deal with cash. They have to deal with coins. And in many countries, many places, they actually ban you from not supporting cash.
JD Durkin: I know Rain describes itself as a full-stack money movement provider. What does that phrase actually mean? Can you help me unpack that for the average person watching Taking Stock?
Farooq Malik: Anybody that wants to embed a dollar product or financial services product into their, you know, offering to a consumer or a business, we have every single thing that you need to turn that on. So if it’s a wallet, it’s the ability to go into stablecoins or out of stablecoins. It’s the ability to spend stablecoins using the Visa or Mastercard networks. We have every single one of those capabilities to allow you to do that at scale, with as much of what you want from Rain, or as little of what you want from Rain.
JD Durkin: And you’re working with a few legacy names in the overall space of global money transfers, Western Union and MoneyGram. How do those partnerships actually work, and what do they tell us about where we are in the process of true stablecoin adoption?
Farooq Malik: Well, both of those companies are really forward-looking, right? They’ve been around for a long time. They’ve seen multiple market cycles. And what MoneyGram and Western Union really saw when they came to us was a partner that was willing to step in and really work with them to design the services and solutions that can put them at the forefront of this new innovation cycle for their business.
JD Durkin: I don’t know if you’re a basketball fan. I’m a big New York Knicks fan. You know, the Knicks beat the Cleveland Cavaliers in the NBA playoffs. You are partnering with the Cleveland Cavs, also universities like Penn State and LSU down in Baton Rouge. Talk to me about what those organizations are actually using this tech for right now.
Farooq Malik: Well, like I said, we believe in adding on, not eliminating or replacing, right? And one of the things that consumers and businesses alike really enjoy about making payments today is rewards. And so a big part of making stablecoins a part of the future of both consumer and B2B payments is really about how we embed additional rewards and keep consumers happy, get them excited about engaging with their loyalty and the affinity brands that they like. And we’re engaging with partners like the Cleveland Cavaliers and the Detroit Pistons, as well as universities like the University of Michigan, Penn State, LSU, like you said, to add that rewards element, to let people earn while they are transacting.
JD Durkin: So congratulations on those partnerships, and thanks for taking some time out of a busy schedule for you here at Money20/20.
Farooq Malik: It’s great to be here. Thank you so much.
JD Durkin: With us, Farooq Malik, CEO of Rain. Don’t go...
