Credit Card Fraud Detection in Payment Using Machine Learning Classifiers

Abstract

The fraud detection in payment is a classification problem that aims to identify fraudulent transactions based individually on the information it contains and on the basis that a fraudster's behaviour patterns differ significantly from that of the actual customer. In this context, the authors propose to implement machine learning classifiers (Naïve Bayes, C4.5 decision trees, and Bagging Ensemble Learner) to predict the outcome of regular transactions and fraudulent transactions. The performance of these classifiers is judged by the following ways: precision, recall rate, and precision-recall curve (PRC) area rate. The dataset includes more than 297K transactions via credit cards in September 2013 and November 2017 that have been collected from Kaggle platform, of which 3293 are frauds. The performance PRC ratio of machine learning classifiers is between 99.9% and 100%, which confirms that these classifiers are very good at identifying binary classes 0 in the dataset. The results of the tests have proved that the best classifier is C4.5 decision trees. This classifier has the best accuracy of 94.12% in prediction of fraudulent transactions.