Fraud Detection in Financial Transactions Using Credit Card: A Machine Learning Model

Abstract

Fraud in any financial transactions causes severe loss to both customer as well as the seller. The loss is not confined to financial loss only but it also causes severe dent to the confidence of the customer especially related to shopping platform and the payment instrument used. Nowadays a substantial part of buying and selling of goods and services are taking place using various e commerce platforms. Many customer use credit card as payment instrument. During the payment process, users do exposes the credit card credentials to the payment platform. These payment platforms are vulnerable to fishing and hacking attackers and the payment instrument remains highly susceptible to fraudulent activities. There are two approaches to dealing with this problem. The first step is to identify the fraudulent activities and second step is to prevent any such attempt of fraud. This paper proposes a model based on machine learning algorithms to identify fraudulent attempts by analyzing credit card transactions data set and proposes methods of preventing such fraud activities. The paper also presents the accuracy of this AI model in identifying and preventing fraudulent and mischievous activities.