DEEP DIVE

How Rain became a Visa Principal Member, a status usually held by banks and a small set of highly regulated payments institutions, and turned that into a $1.95B platform that lets any fintech issue stablecoin-powered cards without a single banking relationship.

I’ve spent the last few days going down the Rain rabbit hole, and the deeper I got, the more I realised this isn’t a crypto story. It’s a payments infrastructure story that happens to settle on a blockchain. That distinction matters.

Fair warning: when a company is called Rain, the puns write themselves. I could not help myself. You have been warned.

JPMorgan Chase has 300,000 employees, $4 trillion in assets, and more than 200 years of history. It is one of a small number of banks that sit directly on the Visa network as a Principal Member. This gives it the ability to issue cards, settle transactions, and sponsor other companies’ card programs without any intermediary.

Rain, a startup founded in 2021, now holds that same status.

That alone would be remarkable. But Rain did something even more unusual with that access: it opened it up. Through a single API, any fintech, crypto wallet, neobank, or enterprise can now launch a full Visa card program without a single banking relationship.One integration. Live in as little as two months (That’s fast). Cards accepted at 150+ million merchants in 150+ countries. And then it settled those transactions in stablecoins.This translates to Rain using 80% less working capital to run a card program than a traditional setup.

And then it went further.

When someone taps a Rain-powered Visa card at a coffee shop, Visa pays the merchant through the acquiring bank. But Rain, as the card issuer, now owes Visa for that transaction.Rain must settle that obligation to Visa within the settlement cycle. That means Rain needs working capital. Every card tap creates a liability that Rain must fund.

At $3B+ in annualized volume, that’s a massive, continuous capital requirement. Traditionally, a card issuer would go to a bank and say, “We’re processing $50M a week in Visa transactions, lend us the working capital to cover settlement.”The lender does due diligence, looks at spreadsheets, trusts your accounting, and lends you the money. It is slow, opaque, and expensive because the lender can’t see in real time what transaction flows are backing their capital.

Rain did something different.It tokenized its payment flows onchain. Instead of showing lenders a spreadsheet that says “we’re processing $50M a week through Visa,” Rain gives capital providers real-time, blockchain-level visibility into the transaction volumes flowing through its system.

Onchain lenders, including protocols like Huma Finance and Credit Coop, provide USDC to fund Rain’s settlement obligations to Visa. In return, they can see on the blockchain exactly what transaction activity backs their capital, updated in real time. No quarterly audits. No trusting the spreadsheet. Smart contracts manage the capital cycle, automating the flow between lenders, Rain, and Visa settlement.

The result: cheaper capital.When lenders have more visibility and less risk, they charge less. When repayment is automatic, operational overhead drops. That lower cost of capital flows through Rain’s entire business, enabling cheaper card programs for partners, cheaper products for consumers, and potentially credit access in markets that couldn’t get it before.Think of it as supply chain finance, but transparent, real-time, and programmable. People have tokenized real estate, bonds, and art. But tokenizing live payment flows from the world’s largest card network and using DeFi capital to fund settlement is new.

The underlying activity is not static. It is a continuous stream of commercial transactions flowing through Visa, giving lenders unprecedented visibility into the payment flows backing their capital. It is, as far as we can tell, the first mechanism of its kind.

To understand why, you need to know what it replaces. If you want to issue a Visa card today, you almost certainly need a BIN sponsor: a licensed bank that holds the BIN (Bank Identification Number, the first six to eight digits on a payment card that identify the issuer and route transactions through the network).The BIN sponsor sits between you and Visa, controls the relationship, charges a per-transaction take rate and layered fees, dictates compliance terms, and can pull out at any time.We saw this play out painfully across fintech in 2023–2024. The poster child was Synapse Financial Technologies, an Andreessen Horowitz-backed middleware company that connected about 100 fintechs to small banks.

In April 2024, Synapse filed for bankruptcy. In May, it switched off the dashboard that its partner bank used to process transactions.Overnight, over 200,000 accounts were frozen. People could not pay rent. Could not make mortgage payments. Around $85 million in customer funds went missing.A bankruptcy judge called it a “hot mess.”Meanwhile, regulators cracked down hard: Formal enforcement actions tripled, and by early 2024, enforcement actions against fintech partner banks accounted for 35% of all regulatory notices, up from 10% a year earlier.Unsurprisingly, Enthusiasm for the BIN sponsor model was dampened

The result is a $1.95B company processing $3B+ in annualized volume, with the majority of its new customers not being crypto companies.They are traditional financial institutions. Why are they all running to Rain?The traditional card issuance hierarchy is a rigid and expensive:

This is why Rain’s partner count doubled from 100+ to 200+ in roughly six months, and why Malik (CEO) reports the majority of new sign-ups are now TradFi programs, not crypto-native ones. The value proposition transcends crypto: any company that has struggled with BIN sponsor access, cost, or reliability has a reason to evaluate Rain.

Rain was founded in 2021 by Farooq Malik (CEO) and Charles Yoo-Naut (CTO). They met through the On-Deck Founder Fellowship and started with an entirely different product: a document-generation tool for angel investments called Sign and Wire.

When customers requested USDC payments and settlement happened instantly, rather than the 7–10-day ACH purgatory, the founders had what Malik calls their “aha moment.” They showed the proof of concept to potential customers, and people asked for the login link within five minutes. As Malik puts it: “Sometimes you just have to be wrong until you’re right. If you’re confident that you’re directionally correct, you just have to stick around long enough and not die.”

Remember Tiny Speck? I thought not. They built an internal chat tool while making a video game nobody remembers, and are now called Slack.Rain built a payment rail while making a document tool nobody remembers. The best infrastructure companies are often discovered rather than planned.

Their backgrounds are complementary. Malik served as Treasurer & Investment Officer at the North American Development Bank, where he built deep expertise in regulatory frameworks, cross-border transactions, and the painful reality of moving billions of dollars via email, PDF, and wire. That TradFi fluency proved critical for securing Visa Principal Member status, a process that typically takes years for established banks and is almost unheard-of for a startup.

Yoo-Naut brings the engineering depth. He started as a product manager at Microsoft, founded PlaybookHR (acquired by Intuit), and served as a principal engineer on the QuickBooks team. He architected Rain’s multi-chain settlement infrastructure from scratch.

Sapphire Ventures, which led the Series B, described the founding team as the kind “this space desperately needs, one that can navigate both the technical complexity of blockchain infrastructure and the regulatory intricacies of traditional finance.” Norwest Venture Partners, an investor since the seed stage, noted they’ve been partners since the company “was just an idea and a Notion doc.”

A few details that reveal the culture. Rain stayed at 11 to 15 people for the first two years, scaling to ~75 only when business dynamics required it. They never had a single down quarter, even through Luna, FTX, SVB, and the full bear market.

In one interview, Malik said he hired a dedicated critic, someone whose job was specifically not to say positive things about the business, but to stress-test every assumption.That kind of discipline is rare in a startup, and it shows in how they navigated the regulatory gray area that killed most of their peers.

Founded - 2021 (New York, NY)

Founders - Farooq Malik (CEO), Charles Yoo-Naut (CTO)

Employees - Growing rapidly (”Rainmakers”)

Valuation $1.95B (Jan 2026), 17x increase in 10 months

Total Funding $338M across Seed, Series A, B, and C

Key Investors

ICONIQ (led C), Sapphire (led B), Norwest (led A), Lightspeed, Dragonfly, Bessemer, Galaxy, Coinbase Ventures, Samsung Next, Endeavor Catalyst, FirstMark

Visa Status - Principal Member (direct card issuance, no bank sponsor needed)

Ann. Transaction Vol. - $3B+ across 200+ partners

Geographic Reach - Cards accepted in 150+ countries

Key Partners - Western Union, Nuvei, KAST, Wyoming (FRNT stablecoin)

The numbers Rain reported at its Series C announcement on January 9, 2026 show a company in hypergrowth:

This growth sits within a broader stablecoin tailwind: total stablecoin transaction volume jumped 72% in 2025, hitting $33 trillion according to Artemis Analytics. USDC led with $18.3 trillion, followed by USDT at $13.3 trillion. Total stablecoin supply now exceeds $290–300 billion.

Rain’s core innovation is a proprietary settlement stack that enables Visa card transactions to be interoperable with stablecoins across multiple blockchains. Here’s the flow:

Traditional Visa settlement operates on a five-day cycle constrained by banking hours and holidays. The system is, quite literally, under the weather: Cuy Sheffield, Visa’s Head of Crypto, has noted that different countries observe different holidays, creating random gaps when value simply cannot move through the system. Credit risk accumulates during those gaps. Rain’s stablecoin-native settlement delivers a 40% increase in settlement availability, reducing credit risk and dramatically improving capital efficiency.

As Malik put it: stablecoins’ merge money movement and reconciliation into a single digital packet.” Traditional “instant” payments still rely on layered IOUs and pre-funding. Stablecoins collapse that structure. Ensuring a transaction “flows into your financial statements, is audit-ready, and GAAP compliant” is the expensive part, and that’s precisely what onchain settlement simplifies.

A critical strategic decision: Rain is blockchain-agnostic and stablecoin-agnostic. Rather than betting on a single chain, they built an omni-chain stack supporting native settlement on multiple networks, including Ethereum, Base, Polygon, Optimism, Avalanche, Arbitrum, ZKsync, Solana, Stellar, and Tron. This flexibility proved essential as different markets show a preference for different chains and as Visa expanded support beyond USDC on Ethereum.

One part that excites me the most is Rain's platform has tokenized its card payment flows onchain, enabling more transparent capital management and giving onchain lenders like Huma Finance and Credit Coop direct blockchain-level visibility into the transaction activity backing their capital.

Rain monetizes through two primary channels:

The model feels structurally similar to Brex or Ramp, but with dramatically lower underlying infrastructure costs thanks to stablecoin rails.

Where traditional card programs require multiple banking partners, pre-funding, and complex correspondent banking relationships, Rain’s stablecoin-native approach eliminates several layers of cost. Malik has emphasized that the hidden working-capital costs embedded in traditional fintech flows (layered IOUs, pre-funding, multi-day settlement float) are drastically reduced when settlement occurs in real time with digital cash.

Exact margin figures are not publicly disclosed. However, the structural advantages are clear: As a Visa Principal Member, Rain doesn’t pay a sponsoring bank’s per-transaction take rate or layered fees (a meaningful cost for BIN-sponsored programs that can amount to millions per year at Rain’s volume). Stablecoin settlement eliminates pre-funding requirements and reduces working capital needs. The company’s ability to raise $338M at a $1.95B valuation suggests strong unit economics and a path to profitability that investors find compelling.

Rain is a B2B infrastructure play. Their technology disappears behind consumer-facing products built by their 200+ partners:

Enterprise partners reportedly include Western Union, Nuvei, KAST, and Rizon. Notably, Malik has said that the majority of new customers signing up are now TradFi programs, not crypto-native ones, a powerful signal of mainstream adoption.

To summarize Rain’s defensibility. The Visa Principal Membership is the moat that matters most, and historically, that’s been nearly impossible to replicate. Layer on chain-agnostic architecture, two acquisitions (Uptop for rewards, Fern for FX) that complete the full-stack offering, regulatory licenses across multiple jurisdictions, and emerging closed-loop network effects, and you have an infrastructure position that gets more defensible as it scales. You can copy the software, but you cannot easily copy the position. For every fintech that didn’t pursue direct licensing when the window was open, that’s looking like a missed opportunity.

Malik puts it bluntly: “The only true moat that anybody can really build is a technical moat. A partner moat or a price moat, these are not really moats. If you want to build this and you want to compete with us, you have to relearn all the things that we learned over the last four years and you’d have to speedrun them all.”

One stat that illustrates the structural advantage: Rain’s stablecoin-native settlement reduces the working capital required for a card program by roughly 80% compared to a traditional setup. That’s not an incremental improvement. That’s a fundamentally different cost structure. And 60% of the programs Rain powers today don’t even look like crypto products. They look like standard dollar payment apps, HSA cards, commuter benefit programs. The blockchain is completely invisible to the end user, which is exactly how Malik wants it: “Consumers should not have to change their behaviour to facilitate a change in technology infrastructure.”

As Malik said in a recent interview, “Everything that Rain has done has been built for the day after regulatory clarity. And now that that’s here, we’re ready.”

Rain sits at the intersection of two massive trends: the $12+ trillion global payments industry and the explosive growth of stablecoins. Total stablecoin supply has grown from $208 billion in January 2025 to over $300 billion by early 2026, with industry projections pointing to $400 billion by year-end 2026 and potentially $2.8 trillion by 2028.

Cross-border stablecoin payment fees have dropped to as low as 0.5%, compared to traditional remittance costs of 6–7%.

Cuy Sheffield at Visa frames stablecoins as “the first global banking-as-a-service layer”, enabling fintech entrepreneurs to build dollar-denominated products that work in any country, without a single traditional banking relationship.

Sapphire Ventures compared Rain to “what Stripe did for online payments: abstracting complexity into elegant APIs and unleashing innovation on top.” I think that’s the right frame, but with one crucial addition. Stripe abstracted away payment processing complexity. Rain abstracts away the banking relationship itself.

For hundreds of fintechs, exchanges, and platforms globally, Rain is the answer to the question: “How do I issue Visa cards without spending two years finding a BIN sponsor who’ll work with me?”

That’s why the Visa Principal Membership is the moat that matters most. It’s not just a technical integration. It’s a regulatory and institutional position that takes years to achieve and gives Rain the ability to be the BIN sponsor for an entire ecosystem of companies. Combined with chain-agnostic architecture, a full-stack platform, 7-day stablecoin settlement, and regulatory readiness across multiple jurisdictions, Rain has built the kind of infrastructure position that becomes increasingly defensible as it scales. Every new partner adds transaction volume. Every new market adds licensing moats. Every new stablecoin integration extends the network.

When Visa’s Head of Crypto says the company may become “a layer two on top of stablecoins as a new settlement network,” Rain is the company actually building that bridge.

The open question, and the one I’ll be watching closely, is whether Rain’s chain-agnostic model wins the infrastructure layer, or whether purpose-built payment chains like Stripe’s Tempo and Circle’s Arc capture the settlement volume directly. I think onchain payment infrastructure financing will be a standalone asset class within two years. Rain and its lending partners like Huma Finance have the first proof point….

Either way, the BIN sponsor model is being unbundled in real time, and the companies that move fastest into the gap will define the next decade of payments. Rain is currently setting the pace. And when it rains, it pours.

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Thanks for reading

James Smith