Transaction Validation

Transaction validation is the process of checking that a transaction is complete, correctly formatted and allowed before a system processes or records it. In bank and card payments, validation happens at several points. A payment platform checks that required fields are present, that amounts and dates are valid, that an IBAN's check digits are correct and that the account number fits the local account format. Clearing systems then validate messages against their scheme rules and reject those that fail, often with a reason code, before any money moves. Issuers validate card data such as the expiry date and CVV during authorisation. On a blockchain, validation is carried out by every node: it confirms that the digital signature is valid, that the sender has sufficient balance, that the nonce or inputs have not already been used, which prevents double spending, and that the transaction follows protocol rules. Validation differs from payee verification, which checks who owns an account.