Credit Card Fraud Prevention Using Blockchain

Abstract

With the advancement of online payments in various products and services, the likelihood of credit card fraud has risen compared to the decades-long history of credit cards. When blockchain systems' immutability meets smart contracts, third-party removal and decentralization could be met as a high level of security. Proposed blockchain with fraud detection technology will assist to mitigate fraudulent credit card transactions due to its intermediate parties. Authors propose a solution (B-Box.com) where credit card transactions are modeled on a blockchain so that the credit card processing can be decentralized and verifiable with an accredited set of computing nodes. This solution reduces fraud due to ambiguous contracts with the use of a smart contract between the bank and the customer. Also, this project includes a scaling mechanism to blockchain because the current projects have a lack of scalability. Moreover, the solution introduces a proactive anomaly detection to detect fraudulent credit card transactions, in which the system will resist frauds before the fraudulent transaction enters the blockchain. So the proposed solution will make transparency between the banks and the end-users and at the same time prevents frauds before it happens which helps the banks to save millions in otherwise lost due to fraud.