What factors are causing the sudden increase in declined transactions for Payhawk's corporate credit cards this quarter?

Introduction

The sudden increase in declined transactions for Payhawk's corporate credit cards this quarter is a critical issue that demands immediate attention. As we delve into this product execution problem, I'll employ a systematic approach to identify, validate, and address the root cause while considering both short-term fixes and long-term strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a seasonal component. Has this increase in declined transactions coincided with any particular business cycle or end-of-quarter activities?

Why it matters: Seasonal patterns could indicate external factors rather than internal issues. Expected answer: Some correlation with end-of-quarter spending, but not enough to explain the full increase. Impact on approach: If seasonal, we'd focus on capacity planning; if not, we'd look more at internal systems.

• Considering user segments, I'm wondering if this is affecting all card users equally. Have you noticed any patterns in terms of declined transactions across different user groups or spending categories?

Why it matters: Segmentation could reveal targeted issues rather than system-wide problems. Expected answer: Higher decline rates among users with larger transaction volumes or in specific spending categories. Impact on approach: Targeted investigation of affected segments vs. broad system analysis.

• Thinking about recent changes, has there been any update to the transaction approval algorithms or credit limit policies in the last quarter?

Why it matters: Recent changes could be directly linked to the increase in declines. Expected answer: Minor updates to fraud detection algorithms, but no major policy changes. Impact on approach: Focus on recent system changes vs. exploring other potential causes.

• Considering data integrity, I'm curious about our monitoring systems. Have there been any changes in how we track or define declined transactions recently?

Why it matters: Ensures we're comparing apples to apples in our metrics. Expected answer: No significant changes to tracking or definitions. Impact on approach: If changed, we'd need to recalibrate our baseline; if not, we can trust the comparative data.