On the benefits of machine learning classification in cashback fraud detection

Technology development has been getting more advanced and greatly facilitated human life. One of them is machine learning automation which has been proven to be consistent for doing various computations against extensive data such as transaction data in the e-commerce area. Seeing this opportunity, we implemented the machine learning approach to detect fraudulent cashback transactions in e-commerce that are currently rife in Indonesia. The training data used to build the machine learning model were the transaction data from one of the leading e-commerce in Indonesia that had been processed. The supervised classification algorithms used were K-Nearest Neighbor (k-NN), Convolutional Neural Networks (CNN), and Long Short-Term Memory (LSTM). In the end, the best steps and methods that could be taken against fraudulent cashback activities in the future are shown in this paper.