Setting up a basic transaction system for payments and transfers is usually the first step in building a fintech app in Nigeria. But as your platform scales, risks like increased fraud, contradictions in transaction data, customer disputes, and unnoticed failed transactions become major concerns. Add that to regulatory non-compliance and cross-border transaction challenges, and you’re facing potential revenue loss and loss of customer trust.

These issues generally pose a great threat, so you need a reliable transaction verification system to address them. This will ensure every transaction is legitimate, minimize fraud, and keep your platform compliant, all while protecting customer confidence.

This guide will show you how to implement transaction verification in your fintech app, giving you the tools to manage risks and scale securely.

Risks of Not Implementing Transaction Verification

When a fintech application is built without transaction verification, several risks can emerge:

Contradictions in Transaction Data: When your application runs a bulk load of transactions, errors like sending an incorrect amount or currency or even making a duplicate charge can occur. When these issues happen, and the transactions aren’t being verified, they result in financial inconsistencies that become difficult to trace.
Customer Disputes: Unverified transactions often lead to customer issues, including disputes over incorrect charges or failed payments. These disputes can harm your reputation and frustrate users.
Regulatory Non-compliance: Many financial regulations require proper transaction validation to protect customers against fraud and maintain data integrity. For example, In Nigeria, the Central Bank of Nigeria (CBN) has established strict guidelines, such as the Anti-Money Laundering (AML) Act, to ensure continuous monitoring of your fintech platform by implementing measures like transaction verification. Failing to comply with these regulations can result in legal issues and costly penalties against your platform.
Unnoticed Failed Transactions: Without a means of verifying transaction status, failed or incomplete transactions may go unnoticed. This tends to disrupt your services, causing your customers to lose confidence in the reliability of your platform.
Loss of Customer Trust: While your customers expect secure and reliable transactions, failing to implement verification can erode their confidence and trust and affect your platform’s reputation.
Revenue Loss: When errors like incorrect charges, fraudulent transfers, or chargebacks happen, they lead to significant financial losses and directly affect your business’s bottom line.
Challenges with Cross-border Transactions: When verifying cross-border transactions, the situation becomes complex due to varying regulations, currency exchanges, and inter-banking systems. Each country has its own financial laws, which must be followed during transactions. When exchange rates fluctuate, inter-bank transfers are delayed or even declined, which will, in turn, complicate the verification process. In this case, implementing a transaction verification system helps avoid costly errors and maintain the integrity of cross-border payments while minimizing fraud and unauthorized transfers.
Increased Fraud Risk: Without implementing a transaction verification process, fraudulent transactions can slip through unnoticed, leading to unauthorized charges and exposing your platform to security breaches.

Steps to Solving These Challenges

By integrating advanced technology with compliance measures, you can overcome the risks and consequences of running your fintech app without transaction verification. Flutterwave provides you with a unified system to manage varying regulations, including Know Your Customer (KYC) and Anti-Money Laundering requirements across multiple countries. By using automated compliance checks and real-time transaction monitoring, Flutterwave ensures you stay compliant with local financial laws while reducing the risk of costly errors and fraud.

Key Stakeholders You Need to Verify Transactions

Transaction verification involves a network of stakeholders, such as banks, payment gateways, regulatory bodies, and merchants. Each plays a crucial role in ensuring the integrity and security of financial transactions.

Banks: Banks are responsible for managing customers' accounts, authorizing transactions, and ensuring compliance with financial regulations. Banks validate transaction details, verify account information, and may also flag suspicious activities if necessary.
Payment Gateways: They act as intermediaries between merchants and banks, facilitating the secure transfer of transaction data. They encrypt sensitive information, such as credit card details, to protect it from unauthorized access. Payment gateways also handle the initial authorization process and provide merchants with the necessary tools to manage payments.
Regulatory Bodies: Regulatory bodies establish and enforce standards and regulations for handling financial transactions. They ensure that all stakeholders comply with legal requirements related to data privacy, anti-money laundering, and fraud prevention.
Merchants: They are responsible for implementing secure payment systems and ensuring that transaction data is handled responsibly. They work closely with payment gateways and banks to facilitate smooth and secure transactions.

How to Verify Transactions with Flutterwave

Login to your Flutterwave dashboard
Navigate to Settings, and head over to your API keys section to get your public and secret keys. Copy the keys and store them in your .env file.

After every completed transaction, you will send a GET request with your public and secret keys to the URL https://api.flutterwave.com/v3/transactions/<id>/verify passing in your transaction <id> with the actual transaction ID.

An example of an HTTP request would look like this in


    const axios = require('axios');

    // Define the transaction ID, expected amount, and expected currency
    const transactionId = '123456789'; // Replace with the actual transaction ID
    const expectedAmount = 1000; // Replace with the expected amount
    const expectedCurrency = 'NGN'; // Replace with the expected currency

    // Flutterwave API URL for transaction verification
    const url = `https://api.flutterwave.com/v3/transactions/${transactionId}/verify`;

    // Make the HTTP GET request to verify the transaction
    axios.get(url, {
        headers: {
            Authorization: `Bearer ${process.env.FLW_SECRET_KEY}` // Replace with your Flutterwave secret key
        }
    })
    .then(response => {
        const transaction = response.data.data;
        if (
            transaction.status === 'successful' &&
            transaction.amount === expectedAmount &&
            transaction.currency === expectedCurrency
        ) {
            // Success! Confirm the customer's payment
            console.log('Payment verified successfully!');
        } else {
            // Inform the customer their payment was unsuccessful
            console.log('Payment verification failed.');
        }
    })
    .catch(error => {
        console.error('Error verifying transaction:', error);
    });

Here’s an example using Flutterwave’s Node.js SDK:

    // Install with: npm i flutterwave-node-v3

    const Flutterwave = require('flutterwave-node-v3');
    const flw = new Flutterwave(process.env.FLW_PUBLIC_KEY, process.env.FLW_SECRET_KEY);
    flw.Transaction.verify({ id: transactionId })
        .then((response) => {
            if (
                response.data.status === "successful"
                && response.data.amount === expectedAmount
                && response.data.currency === expectedCurrency) {
                // Success! Confirm the customer's payment
            } else {
                // Inform the customer their payment was unsuccessful
            }
        })
        .catch(console.log);

You will get a response that returns Flutterwave's version of the completed transaction, which will either be successful or failed. You will then compare with your own record to verify all the information from the transaction.

An example response would look like this:

    # Success
    {
    "status": "success",
    "message": "Transaction fetched successfully",
    "data": {
        "id": 1163068,
        "tx_ref": "akhlm-pstmn-blkchrge-xx6",
        "flw_ref": "FLW-M03K-02c21a8095c7e064b8b9714db834080b",
        "device_fingerprint": "N/A",
        "amount": 3000,
        "currency": "NGN",
        "charged_amount": 3000,
        "app_fee": 1000,
        "merchant_fee": 0,
        "processor_response": "Approved",
        "auth_model": "noauth",
        "ip": "pstmn",
        "narration": "Kendrick Graham",
        "status": "successful",
        "payment_type": "card",
        "created_at": "2020-03-11T19:22:07.000Z",
        "account_id": 73362,
        "amount_settled": 2000,
        "card": {
        "first_6digits": "553188",
        "last_4digits": "2950",
        "issuer": " CREDIT",
        "country": "NIGERIA NG",
        "type": "MASTERCARD",
        "token": "flw-t1nf-f9b3bf384cd30d6fca42b6df9d27bd2f-m03k",
        "expiry": "09/22"
        },
        "customer": {
        "id": 252759,
        "name": "Kendrick Graham",
        "phone_number": "0813XXXXXXX",
        "email": "user@example.com",
        "created_at": "2020-01-15T13:26:24.000Z"
        }
    }
    }

While a failed request would look like this:

    #Transaction not found
    {
    "status": "error",
    "message": "No transaction was found for this id",
    "data": null
    }

After getting the response, you can check the transaction's success status and other details, like currency and amount and customer data, to ensure they match. If they match, you can credit or debit your customer.

When building the verification functionality into your application, you should also follow best practices for storing your key variables, such as, using a .env file or exporting from your terminal. Check out Flutterwave best practices for more tips.

Wrapping Up

Verifying transactions on your fintech application has proven to be important and beneficial in so many ways. It ensures the accuracy of payments on your platform and strengthens user trust by verifying sensitive financial data. In the bigger picture, you can protect your platform and its users from potential fraud and security breaches.

Now that you know why it is important to verify transactions and how to integrate them on your platform, you can confidently and positively answer the question, “Are your transaction services secure and accurate?”

Check out the resources below for more information:

Transaction Verification in Fintech Applications: A Step-By-Step Guide

Risks of Not Implementing Transaction Verification

Steps to Solving These Challenges

Key Stakeholders You Need to Verify Transactions

How to Verify Transactions with Flutterwave

Wrapping Up