HMM Based Enhanced Security System for ATM Payments

Abstract

Due to a rapid advancement in the electronic commerce technology, the use of ATM cards has dramatically increased. As ATM card becomes the most popular mode of payment for both online as well as regular purchase, cases of fraud associated with it are also rising. In this paper, we model the sequence of operations in ATM card transaction processing using a Hidden Markov Model as well as Bluetooth based mobile security model (HMM) and show how it can be used for the detection of frauds. To determine the parameters of a HMM it is first necessary to make a rough guess at what they might be. Once this is done, more accurate (in the maximum likelihood sense) parameters can be found by applying the so-called Baum-Welch re-estimation formulae..