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Case Studies

Driving Away Fraudsters at PayPal


"H2O Driverless AI give amazing performance in terms of feature performance and also model performance."

Venkatesh Ramanathan
Senior Data Scientist
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    Use Cases

    Risk Management

      Overview of the Challenge

      To protect its consumers from fraud, PayPal offers an extensive purchase protection guarantee for buyers, promising to reimburse them for the full purchase price plus any original shipping costs if they fail to receive the item they ordered. A similar protection guarantee extends to merchants through the seller protection program, which helps guard sellers against loss due to claims and chargebacks. Unfortunately, with such a high transaction volume, PayPal has experienced fraud from buyers and sellers colluding to defraud its protection programs. PayPal’s approach to detecting fraud includes using teams of data scientists, financial analysts, and external intelligence agencies to learn how fraud perpetrators think, what drives them, and techniques they may attempt to use to exploit PayPal’s payment system. These teams collaborate to build robust models aimed at predicting and preventing unlawful activity.