Multiple Payment Methods on One Transaction in Magento

They do not need CIM, and the native Authorize.net integration should work just fine. It will provide (very) basic protection such as AVS (assuming they enable and configure it in their account on authorize.net) and also guarantee that they have a valid and matching CVV submitted with the card. However, this will not prevent fraud transactions. Payment gateways do not detect fraud nor do they claim to. They verify the correctness of CC information.

A fraud prevention system will maintain records of information collected from transactions purported to be fraud and cross-check new transactions against it. Not the only technique employed, but one of many. If a particular IP address, for example, is consistently used for fraudulent transactions, that may be used as a check which would raise the fraud score of a transaction being verified. If the score gets to high (I believe the threshold is configurable) then the transaction will go into a suspected fraud or rejection state.

My suggestion would be to look into using a solution such as Kount. They have a working Magento integration via a module they provide you with and you install. It supports using Authorize.net as the payment gateway too.

One thing to keep in mind is that as with anything eCommerce related, the client will need to be willing to put some effort into learning about fraud and how to deal with it effectively. There are many different types of fraud, and the best approach to combatting it can sometimes be different based on the situation.

Custom/Pay/Model/Custom_pay_Model_Paymodel.php

<?php
class Custom_Pay_Model_paymodel extends Mage_Payment_Model_Method_Abstract {
    protected $_code = 'pay';

    protected $_isInitializeNeeded      = true;
    protected $_canUseInternal          = true;
    protected $_canUseForMultishipping  = false;

    // define variable to add a custom form for payment method in checkout
    protected $_formBlockType = 'pay/form_pay';

    //this is the function to get the data in the custom form
    public function assignData($data)
    {
        Mage::log($data->getPayInstallment());
    }
    public function getOrderPlaceRedirectUrl() {
        return Mage::getUrl('pay/payment/redirect', array('_secure' => true));
    }       
}

Custom/pay/Block/Form/Pay.php

<?php
class Custom_Pay_Block_Form_Pay extends Mage_Payment_Block_Form
{
protected function _construct()
{
    parent::_construct();
    $this->setTemplate('pay/form/pay.phtml');
}
}

design/frontend/base/template/pay/form/pay.phtml

<ul class="form-list" id="payment_form_<?php echo $this->getMethodCode() ?>" style="display:none;">
<li>
    &nbsp
</li>    
<li>     
    <input type="radio" style="margin-left: 20px;" id="paysix" name="payment[pay_installment]" value="6" checked>
    <label for="paysix" style="float:left">6 Months</label>    

    <input type="radio" style="margin-left: 10px;" id="paytwelve" name="payment[pay_installment]" value="12">
    <label for="paytwelve">12 Months</label>    
</li>
</ul>

Using the above code i showed a custom form for the payment method with 2 radio buttons. Then in the assign data function i added it to the Mage::Registry and took it from the block which i created the request form and created the form according to the selected values.