AI-Driven Enhancements in Indian Payment Systems: A Futuristic Perspective on Financial Applications and Modifications
T. Swarna, Shraddha Kulkarni, Mayank Kumar, Tenzin Choephel, BH L Mohan Raju, Shruti Gosavi · 2025
This study explores the application of machine learning (ML) to improve Indian payment systems, with a focus on AI-driven developments for tasks including fraud detection, transaction validation, and consumer behaviour research. We evaluate the effectiveness of several machine learning (ML) systems, including K-Nearest Neighbours (KNN), Random Forest (RF), Decision Trees (DT), Support Vector Machine (SVM), and Logistic Regression (LR), using a variety of criteria. The results, which include precision, F1 score, accuracy, recall, and AUC, show how well Random Forest and Logistic Regression work to detect fraudulent transactions. Important elements including transaction amount, payment method, and user behaviour patterns are also revealed by the feature importance evaluation. Significant differences exist between models in terms of training times and hyperparameter optimisation outcomes. All things considered, this study highlights how ML models can spur innovation in Indian payment systems, enhancing security, effectiveness, and consumer satisfaction while offering a thorough assessment structure for potential future implementation in the fintech industry.