CREDIT CARD FRAUD

DETECTION USING
PYTHON

A PROJECT REPORT

Submitted by

MONISH KANNA R (20111033)

DHARNESH L (20111011)
SATHEESH KUMAR M (20111047)

in partial fulfillment for the award of the degree

of

BACHELOR OF ENGINEERING

IN

CYBER SEURITY

PAAVAI ENGINEERING COLLEGE, NAMAKKAL

(AUTONOMOUS)

MAY 2024
 BONAFIDE CERTIFICATE

Certified that this project report “CREDIT CARD FRAUD DETECTION” Using “python”
is a bonafide work of MONISH KANNA R (20111033), DHARNESH L (20111011) and
SATHEESH KUMAR M (20111047) who carried out the project under my supervision.

SIGNATURE SIGNATURE

Dr. P.MUTHUSAMY, M.E., Ph.D., Mrs.R.RAJALAKSHMI,M.ECSE,

HEAD OF THE DEPARTMENT ASSISTANT PROFESSOR

DEPARTMENT OF CYBER SECURITY DEPARTMENT OF CYBER SECURITY

PAAVAI ENGINEERING COLLEGE, PAAVAI ENGINEERING COLLEGE,

NAMAKKAL – 637 018. NAMAKKAL – 637 018.

Submitted for End Semester Examination held on

INTERNAL EXAMINER EXTERNAL EXAMINER

 DECLARATION

We, MONISH KANNA R (20111033), DHARNESH L (20111011) , and

SATHESSH KUMAR M (20111047) hereby declare that the project report titled "
CREDIT CARD FRAUD DETECTION USING PYTHON”, undertaken by us
under the guidance of Mrs.R.RAJALAKSHMI,M.E.CSE is submitted in partial
fulfillment of the requirements for the award of a BACHELOR OF
ENGINEERING degree in CYBERSECURITY. We further certify that, to the
best of our knowledge, this work report does not form part of any other project report
or dissertation based on which a degree or award was conferred on an earlier
occasion for this or any other candidate.

1.

2.
DATE: 3.

PLACE: NAMAKKAL SIGNATURE OF THE CANDIDATE

 ACKNOWLEDGEMENT
A great deal of arduous work and effort has been spent in implementing this project work.
Several special people have guided us and have contributed significantly to this work and
so this becomes obligatory to record our thanks to them.

We express our profound gratitude to our honorable Chairman, Shri. CA. N. V.

NATARAJAN, B.Com., F.C.A. and also to our Correspondent Smt. N. MANGAI
NATARAJAN, M.Sc., for providing all necessary facilities for thesuccessful completion
of this project.

We wish to express our sincere thanks to our respected Director of Administration, Dr.
K. K. RAMASAMY, M.E., Ph.D., for all the blessing and help provided during the period
of project work.

We would like to thank our respected Principal Dr. M. PREMKUMAR, M.E., Ph.D.,
for allowing us to do this project and providing the required time to complete the same.

We wish to express our sincere gratitude to Dr. P. MUTHUSAMY, Head of the

Department, for his extended encouragement to fulfill this project.

We express our sincere thanks, Mr. R. LOGANATHAN, M.E, (Ph.D.)., as a Project

Coordinator for the useful suggestions; this helped us to complete the project work in time.

We would like to extend our sincere thanks to MRS.R.RAJALAKSHMI,M.E.CSE,

ASSISTANT PROFESSOR for giving us this opportunity to do this project and for her
inspiring guidance, generous help and support.

We would like to extend our sincere thanks to all our department faculty members and
to our parents for their advice and encouragement to do the project work with full interest
and enthusiasm.
 ABSTRACT

Credit card fraud has become a significant concern in the financial industry,

necessitating the development of robust detection systems. This study proposes a machine

learning-based approach for credit card fraud detection, integrating several techniques for

preprocessing, feature extraction, and classification. Feature extraction is performed using a

Random Forest algorithm to identify significant features related to fraudulent transactions. For

classification, four different algorithms are evaluated: Gaussian Naive Bayes, Logistic

Regression, Decision Tree, and Random Forest. Among these, Random Forest emerges as the

most effective classifier, achieving high accuracy in identifying fraudulent activities. The

proposed methodology demonstrates the efficacy of machine learning techniques in enhancing

credit card fraud detection systems, contributing to improved security and risk management in

financial transactions We utilize a dataset containing several credit card transactions, including

both legitimate and fraudulent transactions. We preprocess the data and apply various machine

learning algorithms, including logistic regression, random forest, and support vector machines,

to train and test our models. We evaluate the performance of each algorithm based on metrics

such as accuracy, precision, recall, and F1 score , our results indicate that the random forest

algorithm outperforms the other algorithms, achieving an accuracy of 99% in detecting

fraudulent transactions. By implementing this model into existing fraud detection systems,

financial institutions can significantly reduce losses due to credit card fraud while minimizing

false positives.
 TABLE OF CONTENTS

CHAPTER NO. TITLE PAGE NO.

ABSTRACT IV

LIST OF FIGURES VIII

LIST OF ABBREVIATIONS IX

1 INTRODUCTION 01

1.1 PROBLEM STATEMENT 02

1.2 OBJECTIVE AND GOAL 03

1.2.1 OBJECTIVES 03

1.2.2 GOALS 04

1.3 TYPES OF CC FRAUDS 06

1.4 BACKGROUND STUDY 07

1.5 PROBLEM DEFINITION 10

1.6 RESEARCH OBJECTIVES 11

2 SYSTEM ANALYSIS 12

2.1 EXISTING SYSTEM 12

2.2 PROPOSED SYSTEM 13

3 MODULES DESCRIPTION 15

4 SYSTEM STUDY 17

4.1 FEASIBILITY STUDY 17

 4.2 SYSTEM ENVIRONMENT 19

5 PYTHON 30

5.1 HISTORY OF PYTHON 31

5.2 PYTHON FEATURES 31

5.3 MY SQL 34

5.4 STRENGTH OF MYSQL 34

5.5 PYTHON IDENTIFIERS 37

6 SYSTEM MAINTENANCE 41

6.1 MAINTENANCE 41

7 SYSTEM IMPLEMENTATION 43

7.1 QUALITY ASSURANCE 44

8 SYSTEM DESIGN 45

9 TESTING 48

9.1 TYPES OF TESTING 48

10 REFERENCES 51

11 BIBLIOGRAPHY 54

12 CONCLUSION 55

13 FUTURE ENHANCEMENTS 56

14 OUTPUTS 57
 LIST OF FIGURES

FIGURE NO. TITLE PAGE NO.

1 Credit Card 01

2 FLOW DIAGRAM 12

4.1 SETUP 29

14.1 Statistics of CC fraud 59

14.2 Distribution of class 60

14.3 ROC Curve 60

14.4 CC fraud Detection 61

14.5 CC Fraud Results (true) 61

14.6 CC Fraud Results(false) 62

14.7 Results (true) 62

14.8 Results (false) 63

 LIST OF ABBREVIATION

S.NO. ABBREVIATION EXPANSION

1 CC CREDIT CARD

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