Quantum algorithms have demonstrated extraordinary potential in numerous fields. The demand for fraud detection in credit cards is growing increasingly, which calls for more efficient algorithms. This work adopts the detection method of Quantum Support Vector Machine (QSVM) to improve the accuracy of credit card fraud detection. Meanwhile, Quantum-Synthetic Minority Oversampling Technique (Quantum-SMOTE) is utilized to address the issue of imbalanced credit card datasets. The QSVM model maps classical data to a high-dimensional Hilbert space through quantum feature mapping, thereby enhancing the separability of features. Then, quantum kernel computation is performed to calculate the inner products between features for model training. The research results show that the QSVM achieves the best overall performance, which indicates that QSVM has significant potential in handling credit card fraud detection.
Quantum algorithms have demonstrated extraordinary potential in numerous fields. The demand for fraud detection in credit cards is growing increasingly, which calls for more efficient algorithms. This work adopts the detection method of Quantum Support Vector Machine (QSVM) to improve the accuracy of credit card fraud detection. Meanwhile, Quantum-Synthetic Minority Oversampling Technique (Quantum-SMOTE) is utilized to address the issue of imbalanced credit card datasets. The QSVM model maps classical data to a high-dimensional Hilbert space through quantum feature mapping, thereby enhancing the separability of features. Then, quantum kernel computation is performed to calculate the inner products between features for model training. The research results show that the QSVM achieves the best overall performance, which indicates that QSVM has significant potential in handling credit card fraud detection.
The increasing dependence on digital and card-based payment systems has heightened the risk of financial fraud. This situation creates an urgent need for models that can identify rare fraudulent events in uneven transaction data. Traditional machine learning models often sacrifice recall for precision when the minority class is very small. Quantum classifiers are theoretically appealing for capturing complex feature relationships, but current hardware limitations on qubit count and circuit depth restrict their effectiveness. This work introduces a hybrid quantum-classical framework for credit card fraud detection. It combines an Extreme Gradient Boosting (XGBoost) classifier with a Quantum Support Vector Machine (QSVM) that uses a ZZ feature map and a fidelity-based quantum kernel. To handle class imbalance, we apply the Synthetic Minority Oversampling Technique (SMOTE) and adjust decision thresholds. The quantum element is trained on a reduced, class-balanced data subset, ensuring it stays within the feasible limits of the simulator. We merge predictions from the classical and quantum models using a weighted probability fusion approach, optimizing the final threshold to maximize the F1-score. Using the Kaggle Credit Card Fraud Detection dataset, the hybrid model achieves a precision of 0.9783, recall of 0.9000, F1-score of 0.9375, and ROC-AUC of 0.9805. It surpasses the standalone XGBoost baseline, XGBoost with SMOTE, and the standalone QSVM regarding F1 and ROC-AUC metrics. These results show that blending classical gradient boosting with quantum kernel-based classification, along with imbalance-aware techniques, can significantly enhance fraud detection quality despite current quantum hardware limitations. This offers a practical path for future work in quantum-assisted financial security.
With the rapid growth of digital financial transactions, credit card fraud detection has become a critical challenge in the banking and finance sector. Traditional rule-based systems and classical machine learning (ML) models often struggle to detect complex and evolving fraud patterns, especially in highly imbalanced datasets. This paper proposes a novel hybrid approach to credit card fraud detection using Quantum Machine Learning (QML) techniques combined with classical methods. The system applies Principal Component Analysis (PCA) for dimensionality reduction and Synthetic Minority Oversampling Technique (SMOTE) to handle class imbalance. A classical Random Forest model is implemented as a baseline, while a QML model based on Variational Quantum Circuits (VQC) is developed using PennyLane. A hybrid decision engine combining predictions of both models is designed for improved performance. Experimental results demonstrate that the hybrid model achieves 96.9% accuracy, outperforming individual models by achieving better detection rates and reducing false predictions. The system is deployed via an interactive Streamlit-based dashboard. This work highlights the potential of Quantum Machine Learning in enhancing fraud detection systems in financial security applications.
Detecting credit card fraud is notoriously difficult because fraudulent charges make up less than 0.2% of total transactions. Quantum Machine Learning (QML), particularly Quantum Kernel Support Vector Machines (QSVM), promises richer feature representations by embedding classical data into high-dimensional Hilbert spaces. However, whether this theoretical advantage holds up when managing real-world financial data bottlenecks remains unclear. We designed a controlled benchmark comparing three quantum encodings, Angle, ZZFeatureMap, and IQP against classical models while keeping sample sizes, feature counts, and scaling strictly matched. To handle class skew without corrupting quantum state overlaps, we embedded synthetic minority oversampling (SMOTE) directly into the quantum Gram matrix workflow, raising PR-AUC scores by roughly +0.04 across feature maps. When trained on the full European credit card dataset with 30 features, classical baselines reached a top PR-AUC of 0.983. However, restricting classical models to match QSVM hardware constraints (500 samples, 4 PCA features) dropped their PR-AUC to 0.750. This puts our best quantum result 0.730 PR-AUC using IQP encoding on 150 samples into realistic context. Testing on physical quantum hardware reduced performance further to 0.62 due to CNOT gate errors and thermal noise. Overall, our findings pinpoint two main operational bottlenecks for near-term quantum kernels: the scaling of Gram matrix evaluation and heavy information loss from squeezing features onto small qubit registers.
Credit Card Fraud Detection (CCFD) is a major concern for the financial industry, requiring rapid and accurate identification of fraudulent transactions amidst vast datasets. The rapid evolution of quantum computing presents transformative opportunities for enhancing Machine Learning (ML) applications, particularly in the domain of financial security. This paper explores the implementation of Quantum Machine Learning (QML) techniques for CCFD, a critical challenge in the financial industry characterized by imbalanced datasets. Traditional ML models, while effective, often struggle with scalability and computational efficiency when processing large-scale transactional data. QML leverages quantum phenomenon namely entanglement and superposition to potentially outperform classical algorithms in feature extraction and pattern recognition. Our study proposes a hybrid quantumclassical framework, integrating Variational Quantum Circuits (VQC) with classical Neural Networks (NN) to classify fraudulent transactions. Using a simulated quantum environment, we preprocess a publicly available credit card transaction dataset, encoding features into quantum states for processing through a parameterized quantum circuit. The model is trained to improves its ability to detect fraud accurately with fewer false positives, addressing the critical issue of customer inconvenience.
Quantum computing greatly benefit a wide range of fields, including the detection of credit card fraud, through its twin characteristics of improved computational power and efficiency. Quantum algorithms are used to enhance data analysis, pattern recognition and optimization properly with increased speed and efficiency. In the proposed model, we investigate how quantum machine learnings algorithms (QML) are used to spot credit card fraud using a data set that includes transactions from European cardholders. Various models such as neural network activation functions, epochs, and other factors employed in a hybrid quantum-classical method. The results from the best model employing a quantum hybrid technique, a conventional neural network, and an ML approach are compared. For equivalent prediction performance, we find that the quantum models train substantially more effectively than the conventional models. In order to implement Quantum algorithms, penny lane is used for enabling differentiable scripting of quantum computers that is cross-platform. Similar to how a neural network is trained, a quantum computer is trained. Overall, this in-depth investigation of the application of hybrid QML in credit card fraud detection shows significant promise.
Abstract A transformative hybrid approach is proposed, combining Quantum Machine Learning (QML) with both traditional and meta-heuristic feature selection algorithms to overcome the complexities and limitations of conventional credit card fraud detection methods. In this study, advanced data balancing techniques such as SMOTE-ENN (Synthetic Minority Over-sampling Technique–Edited Nearest Neighbors) and Random Under Sampler (RUS) are employed on the imbalanced European Cardholder Dataset to address class imbalance and enhance model resilience. Core feature selection algorithms—both traditional methods like K-Best and meta-heuristic techniques including Particle Swarm Optimization (PSO), Ant Colony Optimization (ACO), and Atom Search Optimization (ASO)—are systematically evaluated, each paired with the Variational Quantum Classifier (VQC) for classification. Remarkably, the PSO+VQC combination achieves an accuracy rate of 94.54%, underscoring the efficacy of integrating meta-heuristic algorithms with VQC to manage complex, high-dimensional data in fraud detection. These findings highlight QML and meta-heuristic algorithms’ potential to surpass conventional methods, delivering superior accuracy and efficiency in critical, data-intensive applications such as financial fraud detection.