Episode 46

Charles Naut from Rain on Crypto Corporate Cards

Charles Naut from Rain on Crypto Corporate Cards

What We Discuss With Charles Naut

Many web3 projects have a significant portion of their treasury in crypto, and paying for expenses like travel bills, SaaS tools subscriptions can be a headache as offramping often comes with friction points.

Having spoken to a few founders in web3 startups & DAOs, often times these teams would rather pay for such expenses using their personal accounts, and then later get reimbursed.

But that’s a messy way to build a web3 project.

Enter Rain, a corporate card for web3 projects. Rain’s mission is to allow you to spend in crypto, without ever needing a fiat bank account.

Their platform is non-custodial, integrates with Gnosis Safe and allows you to have as many virtual cards as you’d like for your team.

On Episode 46, I spoke to its co-founder, Charles Naut.

Connect with
Charles Naut
Co-Founder @ Raincard

[00:00:00] Umar: Welcome to the Accountant Quits, brought to you by the web3CFO Club, a community of web3 CFOs, sharing best practices on web3 operations. And Cryptoworth a crypto accounting solution to help you automate your crypto bookkeeping. On this podcast, we discuss how blockchain will impact the accounting profession and how accountants should prepare themselves for the future of work.

[00:00:26] Umar: My name is Umar, your host, and even if some might refer to me as the accountant gone rogue, my job is to provide you with the blockchain knowledge you need that will be relevant for the accounting industry as a whole.

[00:00:39] Welcome to Episode 46. Many web3 projects have a significant portion of their treasury in crypto and paying for expenses like travel bills, SaaS tool subscriptions can be a headache as off ramping often comes with friction points. Having spoken to a few founders in web3 startups and DAOs, oftentimes these teams would rather pay for such expenses using their personal accounts. And then later get reimbursed. But that’s a messy way to build a web3 project.

[00:01:10] Umar: Enter Rain, a corporate card for web3 projects. Rain’s Mission is to allow you to spend in crypto without ever needing a fiat bank account. What I like with Rain is that it marries the best of both worlds for corporate cards, web2 and web3. Their platform is non-custodial, integrates with Gnosis Safe and allows you to have as many virtual cards as you’d like for your team.

[00:01:35] Umar: Today I have the pleasure to speak to its co-founder Charles Naut. In this episode today, you will learn the pain points faced by web3 projects and DAOs for spending in crypto, what is the Rain corporate card and how to get on onboarded, how DAOs can use Rain, using corporate cards as a spend management tool, and much more.

[00:01:57] Umar: Charles, welcome to the show and thanks for making the time to be here.

[00:02:01] Charles: Thank you. Thank you so much for having me. Excited to talk.

[00:02:05] Umar: So to start, could you share a bit about your background, how you became interested with blockchain? I also read that you were a previous serial entrepreneur. You launched a few startups like signandwire, a tool to help founders automate their fundraising.

[00:02:20] Umar: How did those learnings eventually lead you to launch Rain cards?

[00:02:24] Charles: Yeah, I’ve been interested in entrepreneurship and FinTech for a long time. My first startup was probably in high school. Working with some high school friends. And building a college statistics website. And then my last startup got acquired by Intuit and I was on the self-employed team at Intuit for over four years working on financial tools for people, working for themselves.

[00:02:49] Charles: And then I left Intuit in 2019 and tried to figure out what I wanted to do next. When I first got interested in crypto and the blockchain back in probably 2013 through, Balaji actually, I took his online course ‘startup engineering’. And one of the final projects was building a crowdfunding platform using Bitcoin.

[00:03:11] Charles: And I first time buying Bitcoin through Coinbase. And I was just really excited about the potential for the space, but didn’t really feel like it was ready yet for me to start developing in and building it. It was just still in the infrastructure phase. And in 2019 took some time off to travel around the world and by 2020 was ready to figure out what was next.

[00:03:31] Charles: And I met my co-founder Farooq through the On Deck Founder F ellowship program, and we were both kind of interested in similar things and one of the things that we got excited about was just helping founders fundraise. We had both been on both sides of the table as founders and as angel investors, and saw the friction that there is in just investing in your friend’s startup.

[00:03:55] Charles: And we felt that in 2020 that shouldn’t be the way it is to invest in modern, modern startups, you still have to, you know, pass around DocuSign links through email and send wire instructions through email, and hope you don’t fat finger these, the numbers and send it to the wrong place. We just felt really backwards, so we just started a side project.

[00:04:16] Charles: Didn’t really have big aspirations for it. We just thought it would be a cool way to start working together and explore a co-founding relationship. So we built this project called SignandWire, made it really easy to invest in startup. You just could send your investors a link and that one link had the instructions to sign the founding documents and also send money to the startup.

[00:04:40] Charles: And we helped startups generate the safe documents. We asked ’em all the questions that they needed to fill it out properly, and we started testing it with our founder friends who were fundraising as early beta testers. And we got a lot of great feedback. People really loved the experience, how, how easy it was.

[00:04:56] Charles: But the thing that bottled them the most was how slow it was to actually move funds. Cause we were on top of the ACH rails as we felt that was the best user experience where you can actually authenticate using your bank account and do an ACH push. But it would take anywhere from 5 to 10 days to actually land in the bank account because there was intermediary involved and founders would ping us.

[00:05:20] Charles: So like, oh, investors said they sent it last week and it still hasn’t gotten there. So Farooq and I were, were brainstorming, we both have backgrounds in FinTech and in finance trying to figure out there’s, there has to be better rails out there to move funds and at that time we were both just getting really excited about crypto and DeFi and web3, and we saw the pain points that we were having.

[00:05:43] Charles: Building SignAndWire were actually great fit for cryptocurrencies and especially stablecoins. Because if you’re able to use a USDC as your currency for an investment, you could do that 24/7. You can do it anywhere in the world. You don’t have to worry about bank flagging a transaction as like fraudulent. You don’t have to worry about it.

[00:06:04] Charles: Settling three days later now settling during banking hours. So we started adding the support to actually invest into startups using web3, using stablecoins. And through that, that kind of brought us to Rain, where we started talking to more founders that had fundraised in crypto and crypto treasuries.

[00:06:27] Charles: And the biggest pain point was, yeah, it was a little bit challenging to fundraise, but after that they actually had to spend the money that they raised and their expenses are not that different, from many other startups, whether you’re a web3 team or a web2 team, you still have to pay for cloud computing.

[00:06:42] Charles: You still have to pay for laptops and go to conferences. All these expenses are pretty much the same for the most part. But all of those vendors, they didn’t really accept cryptocurrencies. So these teams were struggling to take these crypto treasury that they had and actually spend it on the expenses that they had for the business.

[00:07:00] Charles: And as you mentioned, a lot of them just put it on their personal cards and would get reimbursed in cryptocurrencies later, and they’d have to figure out how to offramp it themselves, usually through a personal exchange account. Or opening up accounts at centralized exchanges. But if you’re doing, trying to use like Coinbase Institutional or like Gemini business platform that could take a while to actually get onboard and approved, you might get rejected.

[00:07:27] Charles: A lot of banks who are also not willing to bank with crypto teams, especially DAOs and even now, a few of the big friendly crypto banks have just failed. So the banking options for crypto native teams have become even more limited. So that’s what really got the inspiration to build Rain as a solution to enable crypto native teams to actually be fully bankless.

[00:07:48] Charles: With our first product being that you can actually get credit based on the capital that you got on chain and use it off chain on a Visa card that’s supported everywhere already. So you don’t have to wait for a merchant to accept Ethereum or USDC You can actually just give them your Visa card and they’ll accept that purchase.

[00:08:10] Charles: And at the end of the month you have a bill through Rain and then you can pay us back using crypto. And that’s just a simple, easy way to get all of these payments that you need to make done. And what really like solidified the whole experience for us was actually to bring this to Circle. Balaji reached out on Twitter to us and was excited about where we’re building, especially with SignAndWire and enabling people to invest using cryptocurrencies.

[00:08:35] Charles: He had this whole thesis on Cap tables and called the mirror table. So being able to mirror a cap table onchain and after it was Christmas day that he messaged us on Twitter and wanted to invest. And the next day he sent us USDC, it was in our wallet. With our Rain cards, we can go and spend it to throw the business right away versus if he was gonna do that in fiat.

[00:08:58] Charles: And yeah, we’d have to wait. I think Christmas was like on Friday, so he couldn’t send the wire out on Friday and then the weekend, like the banks were gonna be closed so we wouldn’t have gotten the money for probably a week later. So that, just like whole experience of being able to get the investment right away, use the capital right away, really felt like a game changing, like a 100x improvement to the state of the art.

[00:09:20] Charles: And we felt like this is not just how Crypto native teams are gonna be doing business, but in the future every team is gonna be operating on chain cuz it’s just so much more efficient.

[00:09:31] Umar: Wow, what a story. It’s really nice to listen to where you started and where you at right now. And I completely agree with you.

[00:09:38] Umar: Like this is something that all web3 projects need. I was about to ask you about the challenges that these startups and DAOs are facing, but you kind of went through it already, they’d have to wait for months, a lot of times to wait for their bank accounts to be open. And could you give us some other maybe friction points around off-ramping today that you often hear about?

[00:10:02] Charles: Yeah. Even if you, let’s say you, somehow you get your Coinbase institutional account. You get your account at, I would’ve said SVB a few months ago, but that’s no longer an option, but you have your bank account set up somehow. You got a bank that would approve you. You still may be generating revenue on-chain, or you have your entire fundraised in your Safe or in some maybe Fireblocks somewhere.

[00:10:25] Charles: You have to figure out. How much should you off-ramp into your bank account? How often should you do it? You might have to pay fees along the way to actually move the money through the exchange into the bank account. You’re gonna have to wait days for it to actually settle and to be able to use it.

[00:10:39] Charles: So that’s just operational hurdles that you have to jump and, and continuously deal with month after month. And it requires a lot of financial planning to actually have the timing right. If you have like a big bill coming up and you need to pay it today, but your money’s like locked up, you’re not gonna be able to settle it in time.

[00:10:56] Charles: So this is another pain point that we heard a lot was just the time and the fees it takes to actually off-ramp. If you do have all the pieces that you need to off-ramp successfully. And with Rain, we’ll actually let you do that basically instantly. You can go from not having a Rain account. To having a Rain account, walk-in collateral, and having a virtual card in, you know, 5 minutes and being able to start using it.

[00:11:20] Umar: Wow, I want to speak a bit about crypto corporate cards in general. A lot of people are familiar to them, but I want you to explain how they differ from first traditional corporate cards and then also these crypto cards that are being offered from exchanges. So you guys are fully non-custodial. I think that’s a very important distinction, but I also want the listener to understand with a provider offering like a crypto corporate card, what’s different?

[00:11:48] Umar: How are you doing the off-ramping differently? Like even if the end-user is just able to spend the USDC from their non-custodial wallets and pay for their fiat expenses, what’s actually happening in the background?

[00:12:00] Charles: Yeah, so listeners are probably familiar with some of the corporate cards out there.

[00:12:05] Charles: Mostly the startup ones like Brex and Ramp, those usually underwrite based on your fiat balances. So you have money and a bank account somewhere. You connect that to your Ramp, Brex card, and they underwrite based on how much you’ve fundraised or how much you have in that bank account. And at the end of the month, you have to send them fiat to pay off your bill.

[00:12:26] Charles: That’s a challenge, if you don’t have a bank account or most of your capital is not off-chain in a bank account, it’s, it’s actually on-chain. They have like nothing to underwrite. At the end of the month, you have this bill and you have to figure out how to pay it. So that’s, you have to off-ramp that. So with Rain, you don’t have to do any of that.

[00:12:44] Charles: We have smart contracts, so we like to think of ourselves almost like a DeF i protocol with a credit card attached. So you add collateral like you would to like Aave or Compound. And that gives you a spending power, a credit limit on Rain based on how much collateral you’ve locked. If you lock stablecoin, especially USDC, we give you one to one on that.

[00:13:05] Charles: So you put USDC10,000, you have a $10,000 credit limit on Rain, but you can start spending, you have a balance. At the end of the month, we’ll send you a bill, you have a few days to pay that bill off. You can pay it off by sending us USDC. So again, you never need to have fiat, hold a bank account. We can also liquidate the collateral and the smart contract if you’d rather us pay off the bill that way.

[00:13:28] Charles: We just launched the ability to actually not just spend on a card, but actually be able to send a wire or an ACH to a vendor as well. Cause there’s a lot of expenses that a vendor doesn’t take a credit card. You might have legal fee, so your lawyer charges you for their services and they’re not gonna take your credit card.

[00:13:49] Charles: They often require you to wire ACH money to them. So now with Rain, you’re not just limited to credit cards, but you can actually use your spending power and Rain to send an ACH or a wire to vendors all over the US.

[00:14:02] Umar: Alright. I actually, I didn’t know that, that you could also do ACH transfer and wire transfer?

[00:14:07] Charles: Yeah, it’s still a beta feature that we’ve been rolling out to a few teams. We had one team pay their taxes using Rain. We help them do that just in time for tax day. And if you’re comparing us to some of the exchange cards that are out there, like Coinbase has a card and Gemini has a card. The two cards are, I would say are very different, but they represent the two classes of cards that I see coming outta exchanges.

[00:14:34] Charles: So the Coinbase card is a debit card based on your balance that you have with Coinbase. So you have currencies custodied at Coinbase, in Coinbase exchange. They give you a debit card every time you swipe. Takes from what you have at Coinbase to pay for that purchase. If you do use USDC, there’s like no fee.

[00:14:55] Charles: If you use like Ethereum to fund the debit card, there’s a fee for, there’s an exchange fee you that that’s involved with that. That requires you to custody of your funds with Coinbase. And then Gemini Card is a more of a traditional credit card. They do the underwriting based on your credit score.

[00:15:13] Charles: Then at the end of the month, you pay them in fiat. So the only crypto part of it is that your rewards are in crypto, and both these cards are, are also consumer cards. So they’re not designed for teams. You’re not able to spin up multiple virtual cards. You’re not able to set spending limits on them. You can’t have like a multi-user login experience.

[00:15:32] Charles: So yeah, maybe exchanges are not really catering to these whole wave of crypto teams that are formed and operating right now.

[00:15:40] Umar: Alright, that’s very clear. Could you tell us a bit more about the different features that you have now for Rain?

[00:15:47] Charles: Yeah. So a lot of it is similar to a corporate card platform, if you’re familiar with them.

[00:15:52] Charles: So a few things that are web3 twist. So we, you log in with your crypto wallet, so we allow you to sign in with Ethereum, then you block collateral to have a credit limit. You can lock USDC right now to establish that credit limit. And then once you have a credit limit, you can create virtual cards or physical cards. Set spending limits on them.

[00:16:14] Charles: Assign them to different people on your team. You can create bill, create vendors, pay those vendors in ACH or wire. You can attach receipts through your transactions, like if you need to prove that you spent that much at some place, you can add notes to it. You get a bill at the end of the month, you can view that bill.

[00:16:33] Charles: You can see how much collateral you added every month, how many charges you had it, what the charges were for. Yeah those are some of the basic features that we support right now.

[00:16:42] Umar: And how would you approve a transaction? How would you sign and validate a transaction?

[00:16:47] Charles: Like when you swipe a card?

[00:16:49] Umar: Like when it’s time for, let’s say your SaaS subscription. And your card is getting charged. Do you have to sign something additionally for that transaction?

[00:17:03] Charles: No. So as soon as you block collateral and then set a credit limit on the card, then as long as you have enough credit limit on Rain and the card has enough spending power left, then the transactions will be approved.

[00:17:17] Charles: So there’s no gas fee on every single transaction that happens. At the end of the month, you get a bill and then you pay that bill that will require the transaction to pay the bill off, but in between there’s, there’s no fees involved on the platform.

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[00:19:04] Umar: All right, so now about onboarding. How should companies get onboarded today? So I think right now Rain is open exclusively to companies operating in the US. So what are some of the due diligence requirements in order to get accepted and maybe the time it takes for companies to start using Rain and spend their crypto?

[00:19:26] Charles: Yeah, we’re live in the US in private beta, but if you mention this podcast, we’ll get you on the front of the list and try to onboard you as quickly as possible. We usually have a quick onboarding call just to make sure you know how the platform works and can answer any questions you have.

[00:19:39] Charles: And we require you have a EIN number, you can be incorporated, llc, S corp. You can be a non incorporated entity, some DAOs are incorporated that way. As long as you have a US EIN number, we can onboard you. So we will ask for your EIN number. We ask for an address for the business, and then we ask some information about the person who’s signing up, like their date of birth.

[00:20:05] Charles: And their name and email and it’s pretty simple. That’s about it. You probably will take you less than five minutes to fill out all the information and get you set up and rolling, and then in the, hopefully in the, the next month or two, we’ll be able to support teams outside the US actually. That will require a little bit more information that you send us, but you should still take less than 10 minutes to get onboarded.

[00:20:27] Umar: I thought about asking you a question on rewards, but I’m not sure if it’s very relevant because your value proposition today with Rain is so significant that probably rewards is not something you really focused on, but just because it’s like a corporate card. Are there like cashback programs or you intend to offer any of these rewards?

[00:20:48] Umar: But like I said, the way I see Rain operating, like I don’t see even this being relevant.

[00:20:54] Charles: Yeah, not yet. We do plan on having staking rewards, so your collateral that’s on-chain, we hope to be able to allow you to earn yield on it, so we would never hypothecate your funds without your approval. All the funds are on the contracts.

[00:21:10] Charles: Everyone has a separate collateral contract, so you can always verify that your funds are on-chain and safe, unlike an exchange where your funds are mixed up with everyone else’s, and you can never validate if they’re there or not. But we wanna give you the option to stake them or earn yield on them while they’re sitting there as collateral.

[00:21:25] Charles: And then we’ll give you that back, can go towards your balance on the card and pay off some, if not all of the balance. And another thing that we’ve been doing is we are looking at the trends of what our teams are spending on. We notice vendors that are very popular, especially like web3 vendors.

[00:21:44] Charles: There’s a lot of tools that turn web3 teams tend to use. Reach out to those vendors and see if they would be willing to offer a deal to Rain customers. And we have a whole deals platform now where we highlight teams that are giving deals on Rain. So there’s like a few teams now transpose, Alchemy, Niural that are offering deals to Rain customers, and that’s something we’re gonna continue to do.

[00:22:04] Charles: Find ways to save money for the teams on Rain and use the data on the platform to generate those types of savings.

[00:22:10] Umar: What kind of deals like these companies would be offering, for example.

[00:22:14] Charles: Free credits on the platform, discounted subscriptions. Yeah, they’re all, all, all different types of deals.

[00:22:22] Umar: Okay. Now, when I was trying to think of the projects, who would be very happy to use Rain I was thinking about companies who did their fundraising in crypto, like where they have a significant portion of their treasury in crypto so that now they don’t actually have to offramp to spend.

[00:22:38] Umar: Could you, even though if you’re in private beta right now, could you share some, without revealing their names maybe, but share a bit examples of the types of companies that you’ve been onboarding, like DAOs, DeFi protocols, NFT projects, like are there any recurring like types of companies you’ve been onboarding?

[00:22:57] Charles: Yeah, it’s a really broad range of teams that are out there. You know, a lot of DAOs who’ve been on-chain fundraising or they did some sort of token sale. And now they have a big treasury that they have to go and actually build what they promised they’d build. NFT projects that minted on-chain, and now they have all this on-chain revenue and they’re trying to execute against a roadmap or market their project or build out, you know, the next version of it.

[00:23:25] Charles: Crypto native funds or investment firms that have tons of crypto that they’re managing or investing and then they have to operate the fund or the firm. A lot of web3 startups who fundraised in crypto and some DeFi projects as well that have a lot of on chain revenue. So it’s kind of all a gamut of web3 teams that are out there find value in Rain in different ways.

[00:23:48] Umar: I want to take some time to speak about virtual corporate cards as a spend management tool. To be honest, I was not very familiar with virtual corporate cards that gets issued like instantly, like few weeks ago. So just to give the listeners like an overview of virtual corporate cards. So they’re just like the physical cards that you’d use every day.

[00:24:08] Umar: They have the card number, the CVC or CVV code, the expiration date. But the difference between the physical cards is that you can issue them in a few seconds instead of having to wait for days to receive your physical card by post. So, with remote work on the rise, companies can now issue virtual corporate cards to individual employees to cover for their remote working, travel expenses, and then they’d be able to track the spending of these employees.

[00:24:35] Umar: Of course, there’s the risk of an employee making unnecessary/ unauthorized purchases, but with Rain companies can issue such virtual cards. I want to ask you from your experience and feedback you receive, what should the CFOs, CEOs listening know on managing virtual cards about this new, It’s a new product.

[00:24:56] Charles: Yeah, virtual cards are really powerful tool now that CFOs and financial managers have to manage the spend of their teams. We’re seeing a lot of really interesting use cases of virtual cards on Rain and, and the way teams are using it in ways that surprise us, and they’re getting really granular as well, because you can create a virtual card instantly for a specific trip.

[00:25:15] Charles: Let’s say you’re going to ETH Denver and you want people to be able to have a stipend for going on the trip. You can just spin up one virtual card. Has X amount of dollars that they can spend in the next 7 days, and at the end of 7 days they don’t spend it. The virtual card is no longer useful.

[00:25:31] Charles: Or you can have reoccurring monthly card for wellness expenses that the team is allowed to make, or SaaS expenses the team is allowed to make. So you can actually get really granular in how you’re controlling the spend of the team and how much is allowed to be spent. And we feel like this is a very powerful tool for DAOS as well, because there’s been a few instances of backlash of DAOs who have been accused of inappropriately spending the DAOs funds. And one big problem is that when spending happens off chain, there’s a lack of transparency and accountability for that spending. You don’t really know how much is spent, where was it spent at, why was it spent, because there might be one lump sum that comes from the on-chain treasury to off-chain.

[00:26:15] Charles: But once it’s off-chain, who knows what happened to it. So with Rain, there’s actually some control to that. You can see designated specific virtual cards for specific people. Transactions are on the dashboard. We have plans to actually make some of those transactions like Token Gated, so members of the DAO can actually view the transactions that the DAO has made off chain and view that, okay, actually all the expenses were legit.

[00:26:39] Charles: They have receipts attached. They were used for DAO purposes and appropriate. So this really creates a whole level, new level of accountability and transparency and control for crypto native teams.

[00:26:51] Umar: I found this so interesting. I’ll give you a simple example. So like, I’m a freelancer. I’ve got these expenses that I claim back to my client like every month.

[00:27:01] Umar: The expenses like remote work, I mean a co-working space, medical insurance, some other expenses here and there. I found this really convenient. Like if the client could just allocate me a virtual card so that I don’t have to then claim the expense, they also save time because they don’t have to pay for the expense.

[00:27:20] Umar: Again, it is only paid once, right? So I found this a huge time saver, but I’ve spoken to a few people, few CFOs that told me, they’ve had bad experiences in the past where maybe the employer or the freelancer would abuse, like, but if you’re really able to put allocate an amount that, you know, is recurring every month, I don’t see why that’s a problem.

[00:27:38] Charles: Yeah, the reimbursement model before Rain was probably the most common model that a lot of these teams were using to handle off-chain expenses, and it created, I would say, some tension between individuals and people controlling the treasuries because, people might assume that they were allowed to expend X amount and they put their own cash to spend that amount, and then they go to get reimbursed, and then they’re like, oh, wait, actually, you never asked for this permission, or, I didn’t know it was gonna be that much, or there wasn’t that communication maybe upfront on what could be spent.

[00:28:15] Charles: And then both people are in bad positions. The individual is in a bad position because their personal cash and the financial managers is in a bad position because they may be liable for reimbursing this person, or at least have to tell them that they can’t be in reimbursed. And that creates a lot of tension.

[00:28:31] Charles: So by actually having virtual cards with Rain, you can have that discussion up front, set the credit limit. And any transaction or some of transactions can’t really go above that amount, and there’s that mutual understanding of that fact before.

[00:28:44] Umar: Before we continue, we’ll take a quick commercial break from our sponsor.

[00:28:52] Umar: Working in Web3 can transform your career, be financially rewarding and surround you with a vibrant community. But as you’re very much aware, this space requires rethinking a lot of the old models of how we work. For example, as the leader in a Web3 organization, it’s up to you to figure out the most cost-effective way to off-ramp the company’s crypto. Or what’s the most efficient setup to mass pay your contractors in crypto.

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[00:29:46] Umar: And you know what? I’m also responsible for accepting new members and growing the web3CFO club. So if you’re web3 business founder, CEO, CFO, or in charge of financial operations, you can join this exclusive community today by filling up an application form at theaccountantquits.com/web3CFO. Subject to a screening check, you will then start interacting with high profile web3CFOs, get access to members only benefits, like webinars, resources, and invitations to physical meetups. Join the club today and let’s win Web3 financial operations together.

[00:30:26] Umar: Now, I have an accounting and auditing background, and I couldn’t help myself thinking of the accounting implications of now, previously a company, let’s say they had one credit card paying for expenses, but now using virtual cards, the number of transactions will exponentially increase and it’s up to the accountant to try and bookkeepe it.

[00:30:49] Umar: So let’s say the company has a hundred employees, a thousand employees, and if everyone has a virtual credit card, I wanna understand how to, from the accountant, CFO point of view, or how does Rain facilitate to reconcile, like all these transactions?

[00:31:05] Charles: Yeah, we do have ability to export to QuickBooks, which we found to be a popular tool that a lot of teams are using or just CSV where people can then go and play around with it however they want to, to play around with the data.

[00:31:19] Charles: We’re actively talking to a lot of web3 native accounting tools that are popping up to do integrations with them. And this is where we’re trying to get better with categorization. So how do you actually upfront categorize these transactions correctly? Using AI and, and different inputs to assign the right categories so when they do go into the accounting system, they can be reconciled correctly and appropriately.

[00:31:41] Charles: We’ve been adding more features for bookkeepers. So actually you sign up for Rain, there’s a bookkeeper role, and you can assign someone. So they have access to all the financial aspects of Rain without having administrative access or ability to create cards. And they also have a different view of the team overall.

[00:31:58] Charles: We realize a lot of bookkeepers don’t have crypto wallets. They might be more of a web2 traditional finance, financial accountant and not so crypto native. So we’re adding the ability to sign in with email and password if you have people on your team that don’t have wallets, or not with crypto native, but still need to be able to access Rain.

[00:32:16] Charles: So I think the whole crypto accounting landscape is kind of very messy right now. We’re even ourselves dealing with you know, all of the different transactions in different places, different wallets, different chains on-chain, off-chain. It gets really confusing, but I think that’s also a huge opportunity to automate all of this, make it a lot smoother.

[00:32:36] Charles: All the data is there. It’s just about connecting the right dots and making it go to the right places smoother. So that’s something we’re actively trying to improve for teams all over.

[00:32:46] Umar: So for these web3 projects already using those crypto accounting solutions like Cryptio, Bitwave, Tres Finance, so let’s say they would be able to pull all these transactions from Rain onto those softwares first, right?

[00:33:02] Charles: Yep, exactly. Okay. Right now through csv and then we’re working on direct integrations with some of the, the top ones that are out there.

[00:33:09] Umar: Very interesting. Now there’s a growing number of crypto focused FinTech companies emerging in web3 offering corporate cards like Brex you mentioned, Ramp, Air Wallex, Reap. For people listening, people like to understand the difference, like between all these solutions, how would you say Rain is like a different from the other payment solutions, like the prominent ones currently available?

[00:33:33] Charles: Yeah, I think for, we differentiate from some of them in different ways and so I’ll just give you overall, like the differences. One is that Rain is designed from the ground up for crypto-native teams. We’re not servicing other teams that are, you know, maybe have bank accounts or fiat. We’ve gotten a lot of feature requests for those types of features. But we really have focused on this segment because we feel like this is actually gonna be the future of a lot of businesses operating on-chain more and more.

[00:34:03] Charles: Two is that we’re non-custodial, so we, there are smart contracts out there that teams can lock their collateral with and that is what powers your, your spending power in Rain. Those contracts, you can audit them, you can look on-chain, make sure your funds are there so you limit the amount of trust that you have to have with us.

[00:34:21] Charles: And then with Rain, you never have to have, like our goal is to allow you to operate fully bankless. So our first product was cards. We just launched ACH and wire transfers, and we’re gonna continue to continue pushing that so that you can actually fully operate your business, your team, your DAO, whatever it may be, without having touch fiat or open up a bank account at traditional financial service.

[00:34:46] Charles: But you can still do everything that you would need to do. As a modern business. So I think those are kind of the ways that we’re trying to differentiate from everyone that’s out there.

[00:34:56] Umar: Now, I know you’re in private beta and, but you’ve been onboarding a lot of companies. So I want to ask you, what are some of the biggest challenges faced by Rain today in terms of adoption?

[00:35:06] Umar: We can skip regulation because we all know we need like more regulation, but anything else around communication, education?

[00:35:15] Charles: Yeah, I think a few things. One is became very clear to us early on that this is a very global problem. We couldn’t just focus on the US alone. We have to build very early, an international payments platform that both services teams around the world and allows them to pay people and pay vendors and pay businesses around the world.

[00:35:39] Charles: So we’ve been working really hard to make sure that we are building that truly global financial platform. Another is the compliance landscape is very, very challenging. Making sure that you are collecting the right data to make sure that you’re not enabling any terrorist activity or, or money laundering or any illegal activity, but also providing a seamless experience for teams where they’re not, you know, signing off their whole life in Rain and giving us every single piece of information that they have. So that kind of balance is really delicate, but we’re trying to strike the right balance and provide the best experience for the teams that, that we can.

[00:36:20] Umar: In terms of some of the upcoming trends that you see for crypto spend management. So as DeFi continues to evolve and expand. What other types of products and services do you see becoming available to web3 Startups and DAOs. And how might Rain evolve to keep meeting these changing needs? You spoke about the ACH and wire transfer currently in beta thing. That’s fantastic. Are there anything else on the roadmap that you could share with us?

[00:36:44] Charles: Yeah. I think we’re living in a increasingly multi chain world. Where teams funds are gonna be more and more spread across different L2s, different L1s, L3s in the future, and managing all of those chains and the funds across all of those chains is gonna be increasingly complicated. Not to mention all of the accounting challenges with accounting for all of those different chains.

[00:37:15] Charles: So one thing that we’re actively working on is making that as seamless as possible. Being able to leverage your capital across all the chains that you have to bend through Rain. We think that’s gonna become very important as L2s adoption ramps up as alternate L1s and cross-chain bridges become easier to use.

[00:37:38] Charles: People are gonna, as app chains become more popular. People are gonna increasingly be using more and more chains and going to need to have tools that speak all those different chains languages and incorporate them into a seamless experience. So that’s a big challenge that we see in a trend that we see increasing and that we’re trying to solve for with Rain.

[00:37:57] Umar: Very interesting. Charles, we are coming to the end of the episode today. Has there been anything else that maybe we didn’t touch on that you think would be important for the listeners to know, or anything as closing thoughts that you’d like to share with the listeners?

[00:38:08] Charles: I’ll just say we’re really excited about the whole future of web3 and Crypto native teams, and we’re excited to be empowering all the future of teams building in this space.

[00:38:24] Charles: And if any team, this challenge that we’ve talked about over the last, you know, 40 minutes resonates with them and thinks that what we’re building at Rain, it could be useful. Reach out to me directly. You can email me at charles@raincards.xyz. I’m on Twitter, on Telegram, and we’ll try to get you onboarded or see if there’s a way that we can help solve your problems.

[00:38:51] Umar: Perfect, I think I shared with you previously, I’m also managing this community called web3CFO Club and the finance manager from Rain is actually a member, Chris, I think his name is. Yeah, exactly. Yeah. And that’s a conversation that regularly comes up like around spend, management in crypto.

[00:39:08] Umar: So I think I’d be happy to share the episode with them and have them reach out to you. People did ask about, I mean, people outside of the US did ask about when is Rain expanding outside?

[00:39:21] Charles: Very soon. Yeah, so that’s, I’ll make sure to update you when we’re, we’re ready to go.

[00:39:26] Umar: Alright Perfect. There’s the last question that I like to ask to my guest is, you have a favorite quote or maxim that you live by?

[00:39:37] Charles: Oh, that’s a good question. I always think this is like the quote that I put in. My middle school yearbook, it was from Uncle Ben in Spider-Man. With great power comes great responsibility.

[00:39:47] Charles: So I think that always resonated with me that, you know, even if you have more resources or capable of doing more, that just means that you are expected to do more. And that’s, yeah, something carried with me for a long time. I love it.

[00:40:03] Umar: Charles, thanks a lot for coming today. Before we go, if people want to reach out to you, on social media or through the Rain website or what’s rather the best way for people to reach out to you?

[00:40:17] Charles: Yeah, if you wanna reach out to me directly, email, it’s best. So, charles@raincards.xyz. You can reach me, you can sign up for the wait list at raincards.xyz. And if you mention this podcast, we’ll give you a little bump on the list as well try to onboard you quickly. You can also message me on Telegram. It’s cnaut, same thing on Twitter.

[00:40:46] Umar: All right, I’ve noted that down. So I’ll include that, those in the shownotes.

Perfect. Thank you. Well, thanks again for coming today, Charles. I didn’t know much about this particular topic, so I enjoyed just researching about this and learn, actually learned a lot from this episode today. We’ll speak soon. Bye.

[00:40:54] Umar: I would like to thank everyone for listening to this episode. You’ll find all the links of the episodes, show notes and transcripts on the website of The Accountant Quits at theaccountantquits.com. Please note that this content is for general information purposes only and is not a substitute for consultation with professional advisors.

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