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29 views

Abstract

Uploaded by

tejutatapudi
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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An Industry Oriented Mini Project (CS705PC)

On
UPI Fraud Detection Using Machine Learning
by

T.Tejikhaa (21261A6661)

Under the Guidance of

Mr.K.KotaiahSwamy
Department of Emerging Technologies
Mahatma Gandhi Institute of Technology
Abstract

This project explores the application of machine learning techniques for detecting and mitigating
UPI fraud, with the aim of enhancing the security and reliability of digital payment systems.We
then develop a comprehensive dataset that captures a wide range of transaction features such as
transaction amount, frequency, time of transaction, and user behavior patterns.Using this dataset,
we implement and compare several machine learning models, including Logistic Regression,
Decision Trees, Random Forests, and Neural Networks, to detect fraudulent transactions.Our results
demonstrate that machine learning models, particularly ensemble methods like Random Forests and
Gradient Boosting Machines, are highly effective in identifying fraudulent activities with a high
degree of accuracy and low false-positive rates.
Introduction
• The rapid growth of digital payments has transformed the way we conduct financial transactions, with Unified Payment
Interfaces (UPIs) emerging as a popular choice for online transactions. UPIs offer a convenient and efficient way to
transfer funds, but their increasing adoption has also created new opportunities for fraudsters to exploit vulnerabilities
in the system.

• As the volume of UPI transactions continues to rise, the need for effective fraud detection and prevention mechanisms
has become more pressing. Traditional rule-based systems have limitations in detecting complex and evolving fraud
patterns, making it essential to explore innovative solutions. Machine learning, with its ability to learn from data and
improve over time.

• This project aims to develop and evaluate machine learning-based algorithms for detecting UPI frauds, addressing the
unique challenges posed by publicly available data, high-class imbalance, dynamic fraud patterns, and high false alarm
rates. By leveraging machine learning techniques, we seek to improve the accuracy and efficiency of fraud detection,
ultimately contributing to a more secure and reliable digital payments ecosystem.
Exisiting System
• Transaction amount and frequency.
• User behavior and location.
• Merchant and device information.

The existing system has several limitations:

• Static rules: Rules are not adaptive and may not keep pace with evolving fraud patterns.
• High false positives: Innocent transactions may be flagged as fraudulent, leading to unnecessary
interventions.
• Low detection rates: Sophisticated frauds may evade detection due to the simplicity of the rules.
• Manual intervention: Heavy reliance on manual review and investigation, leading to delays and
increased costs.
• Lack of real-time detection: Fraud detection may occur after the transaction has been processed,
allowing fraudsters to escape with funds.
• Inadequate data analysis: Limited ability to analyze large datasets and identify complex patterns.
Proposed
System
• Machine learning models: Trained on historical data to identify complex patterns and anomalies
indicative of fraud.
• Al-time detection: Transactions are evaluated in real-time, enabling swift intervention and minimizing
potential losses.
• Dynamic rule generation: Machine learning algorithms continuously update rules to adapt to
evolving fraud patterns.
• Advanced data analysis: Large datasets are analyzed to identify subtle patterns and connections,
improving detection accuracy.
• Automated decision-making: Machine learning models make decisions, reducing manual
intervention and increasing efficiency
Technical
Specifications
Software Requirements:
1. Operating System: 64-bit Linux distribution like Ubuntu or CentOS.
2. Programming Languages: Python 3.x, R, or Julia for building machine learning models.
3. Machine Learning Frameworks: TensorFlow, PyTorch, Scikit-learn, or Keras for building and
training models.
4. Data Analysis Tools: Pandas, NumPy, Matplotlib, and Seaborn for data preprocessing and
visualization.
5. Database Drivers: MySQL Connector/Python, psycopg2, or similar for connecting to RDBMS.

Hardware Requirements:
1. Server: High-performance server with at least 16 GB RAM, 4 CPU cores, and 1 TB storage.
2. Database: High-performance relational database management system (RDBMS) like MySQL or PostgreSQL.
3. Storage: Fast storage solutions like SSD or NVMe for storing large datasets.
Conclusion
The UPI Fraud Detection system developed in this project marks a significant milestone in the quest to secure
digital payments. By harnessing the power of machine learning algorithms, the system demonstrates
exceptional accuracy in identifying and preventing fraudulent transactions. Unlike traditional rule-based
systems, which often struggle to keep pace with evolving fraud patterns, our system adapts and learns from
data, ensuring its effectiveness over time. With its ability to detect fraudulent transactions in real-time, the
system minimizes potential losses and enhances the overall security of digital payments. Moreover, by
reducing false positives, the system improves the user experience, eliminating unnecessary interventions and
fostering trust in digital payments. As the digital payments landscape continues to evolve, our system
provides a robust and scalable solution, capable of integrating with existing payment infrastructure. By
implementing this system, financial institutions and payment providers can significantly enhance security,
reduce losses, and improve user satisfaction, ultimately contributing to a secure and reliable digital payments
ecosystem.
Bibliography

• "Machine Learning for Fraud Detection in Digital Payments" by A. K. Singh et al. (2020)
• "UPI Fraud Detection Using Machine Learning Algorithms" by S. K. Goyal et al. (2019)
• "A Survey on Machine Learning Techniques for Fraud Detection" by A. Bhatia et al. (2018)
• "Fraud Detection in Digital Payments: A Review" by S. S. Rao et al. (2019)
• "Machine Learning for Anomaly Detection in Financial Transactions" by Y. Zhang et al. (2019)
Thank You

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