Improvement in settle up button
Your concept is great. I like everything about your application.
In current style of your settle up any party can go and settle up the payment. Make it mandatory for both party to recognize the payment. That will be much better. Also add flexibility in payment. include option for payment of amount which is less than actual amount in settle up.

Thanks for the suggestion! You can already pay a different amount when making a payment. Just edit the total in the record payment form before saving the payment.
As for payment confirmations, Splitwise actually used to work this way, but we got rid of the confirmation step because people complained that it was too much of a hassle.
Our in-between solution was email notifications. By default, you should get an email any time someone says they have paid you, and then if you wish you can double-check that they have actually given you money. (And if they haven’t, then you can delete the payment from Splitwise or comment on it!) You can also see a full record of changes in your account at any time by going to the “Recent activity” screen.
Hope that makes sense! Let us know if you have questions or concerns.
Marshall