What's causing the sudden increase in declined transactions for Pleo's virtual cards over the past week?

Introduction

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

Our analysis will follow a structured framework, covering issue identification, hypothesis generation, validation, and solution development. This approach ensures we leave no stone unturned in our quest to resolve the issue and prevent future occurrences.

Step 1

Clarifying Questions (3 minutes)

• I'm noticing the issue is specific to virtual cards. Are physical cards experiencing similar problems?

Why it matters: This helps isolate whether the issue is specific to virtual card infrastructure or a broader system problem. Expected answer: No issues with physical cards. Impact on approach: If confirmed, we'll focus on virtual card systems and processes.

• Has there been any recent change in transaction volume or patterns for virtual cards?

Why it matters: Unusual activity could indicate fraud or system overload. Expected answer: Slight increase in transaction volume, but within normal range. Impact on approach: If confirmed, we'll investigate capacity issues and fraud detection systems.

• Have we implemented any recent updates to our virtual card system or related infrastructure?

Why it matters: Recent changes could have introduced bugs or compatibility issues. Expected answer: Minor update to fraud detection algorithm last week. Impact on approach: If confirmed, we'll prioritize reviewing the update and its potential impacts.

• Are declined transactions concentrated in specific merchant categories or geographical regions?

Why it matters: This could indicate issues with particular payment processors or regional regulations. Expected answer: No clear pattern in merchant categories, but slight increase in declines for international transactions. Impact on approach: If confirmed, we'll investigate international payment processing and compliance systems.

• Have we received any feedback from users or customer support regarding error messages or specific issues during declined transactions?

Why it matters: User feedback can provide valuable insights into the nature of the problem. Expected answer: Some users reporting "insufficient funds" errors despite having available balance. Impact on approach: If confirmed, we'll focus on balance calculation and authorization systems.