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Machine Learning Advanced Pro

Case Study: Real-Time Payment Fraud Detection (Stripe / PayPal-style)

Walk through a full ML system design interview answer for in-authorisation fraud scoring

30 min read 6 views

Model interview answer for real-time payment fraud detection: sub-100 ms decisions, 0.1 % positives with asymmetric costs, delayed chargeback labels, point-in-time features and velocity counters, GBDT plus graph signals, PR-AUC and dollar-weighted evaluation, cost-based decision policy and a streaming serving architecture.

Practice questions (5)

  • Why PR-AUC Beats ROC-AUC at 0.1% Fraud Prevalence

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  • Label Maturity and Selective Labels

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  • Cost-Based Thresholds Across Transaction Amounts

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  • Training/Serving Skew in a Velocity Feature

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  • Responding to an Adaptive Fraud Ring

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