REDUCING FRAUD IN ELECTRONIC PAYMENT SYSTEMS

The number of fraudulent activities is increasing dramatically in telecommunication networks, mobile communications, and E-commerce. Fraud is a major problem in electronic payment systems. For example, card fraud losses are growing every year. Consequently, fraud detection is becoming an important issue for research. Fraud begins to rise as new technologies and new weaknesses are found. Reducing fraud is a complex process which includes the knowledge from many scientific areas and demands a multidisciplinary approach. In this paper the problem of fraud prevention and detection is addressed. Several techniques for fraud prevention and detection are presented. It is important that fraud can be detected as it is happening. Detecting fraud in real-time is not easy so it is not surprising that many fraud systems have serious limitations. New solutions such as fraud management systems can reduce fraud significantly by using and combining many existing techniques, as well as new ones