Fraud detection and risk assessment of online payment transactions on e-commerce platforms based on LLM and GCN frameworks

Abstract

With the rapid growth of e-commerce, online payment fraud has become increasingly complex, posing serious threats to financial security and consumer trust. Traditional detection methods often struggle to capture the intricate relational structures inherent in transactional data. This study presents a novel fraud detection framework that combines Large Language Models (LLM) with Graph Convolutional Networks (GCN) to effectively identify fraudulent activities in e-commerce online payment transactions. A dataset of 2,840,000 transactions was collected over 14 days from major platforms such as Amazon, involving approximately 2,000 U.S.-based consumers and 30 merchants. With fewer than 6000 fraudulent instances, the dataset represents a highly imbalanced scenario. Consumers and merchants were modeled as nodes and transactions as edges to form a heterogeneous graph, upon which a GCN was applied to learn complex behavioral patterns. Semantic features extracted via GPT-4o and Tabformer were integrated with structural features to enhance detection performance. Experimental results demonstrate that the proposed model achieves an accuracy of 0.98, effectively balancing precision and sensitivity in fraud detection. This framework offers a scalable and real-time solution for securing online payment environments and provides a promising direction for applying graph-based deep learning in financial fraud prevention.