What is OTP Verification and How does it Prevent Unauthorized Access?

OTP stands for a one-time password,  it is a unique string of characters that allow users to authenticate their identity before login into their account. With the help of OTP, users get a single login attempt to access their accounts. 

OTP helps users to start their login session securely. We all will accept the fact that online fraud has become quite common nowadays. A bit of carelessness from the users’ end can cause more significant harm, which is why we should be cautious while making online transactions.  

SMS OTP verification and two-factor authentication (2FA ) are considered the most effective solutions that not only prevent the possibilities of online fraud but also authenticate the identity of the users. Business use OTP and two-factor authentication to verify and protect their customers’ personal information from online fraudsters. With the help of this method, they quickly validate the authenticity of the user from anywhere in the world.

Today in this article, we will discuss the working functionality of OTP and 2FA and how they benefit businesses and users.

So let’s get started

What is OTP (One Time Password)?

OTP is a unique and advanced identity verification tool that authenticates the identity of users before they access their accounts. Users receive a unique string of characters; with the help of these characters, they can start their login session and access their accounts. OTPs have some unique features, such as time, sensitivity, and single use. These features help businesses and end users to have a higher level of protection against online fraud and data leaks.

What is the Working Functionality of OTP?

Whenever a user tries to access his account using an unauthorized device, an OTP generator that works with an authentication server (with the shared token) verifies the identity of the user by sending OTP to mobile number. 

OTP generator utilizes hashed message authentication code algorithm, which generates random codes for end users’ requests. OTPs are designed to work once only in a given time frame.

What are the OTP use cases and examples?

There are endless OTP use cases and examples. Some of them are given below: 

• Financial services and digital banking sectors use OTP and 2FA to authenticate their users’ identities. With the help of these systems, they prevent online fraud and spammers.
• IT services use OTP services to authenticate work devices, signup, and login, password recovery, and many more.
• Business administration and government services use OTP for multiple purposes. 
• Health care, retail, and e-commerce use mobile OTP verification to ensure product and service delivery. 

What are the Benefits of Using OTP?

Online fraud and spamming are quite common nowadays. That’s why businesses always communicate through secure channels to secure the personal information of their users and employees.

There are many benefits of using OTP, some of them are listed below: 

• OTP helps us to protect our data and acts as a security bridge between users and spammers
• Convenience and ease of use 
• Scalable

Prevent Identity Theft

With the help of OTP messages, businesses secure their communication with their customers. OTP for authenticating the identity of a user makes it quite difficult for someone to break into a customer’s account and access his personal information. Let’s understand this with the help of a simple example, 

Suppose an unauthorized person is trying to access someone’s account, the actual account holder will get an OTP and he will have an idea that someone is trying to access his account. The user will have enough time to take precautionary measures to prevent unauthorized access. Also, the organization will not allow that unauthorized person to access the account if he cannot clear all the security checks, and that’s how OTP works. The user will have complete information about such activity and he can take further steps to protect his account.

Highly Impossible to Guess the Exact OTP 

An algorithm generates OTPs. These are unique strings of characters that involve numbers and alphabets. For an unauthorized user, it’s challenging to guess the exact OTP. 

Improves the User Experience

The success of any organization depends on how it develops a bond of trust with its customers. As per research, when a customer feels secure and safe, and have a sense of security with their personal information, and they feel more connected with the brand and become loyal customers.

With the help of OTP and two-factor authentication, organizations not only help their customers to have a secure communication channel but also gain their trust.

Tips to Keep your Password Safe from Online Fraudsters

Multilevel authentication allows users to protect their data and sensitive information from hackers. However, you should be very careful with authentication passwords.

Here are some useful tips that will help you to maintain good password habits

• Avoid sharing your password.
• Never use the same password for multiple accounts.
• Keep your password unique and use special characters, numbers, alphabet, and case-sensitive symbols. In that way, you can prevent hackers from guessing your passwords.
• Do not use online portals for securing susceptible information
• Always use a multilevel data authentication process to keep your information safe from unauthorized attempts from hackers.

Frequently Asked Questions 

What is two-factor authentication?

It is a type of multiple-level authentication used to authenticate users’ identities and offers additional layers of security parameters. It is a process in which users are required to enter two factors before login into their accounts. 

Two-factor authentication offers a higher level of security than single-factor authentication, which is why businesses use multilevel authentication to identify the authenticity of their users and employees. 

How can I get my OTP code?

Whenever users try to access their account from an unauthorized device they receive an OTP message text or email for starting their login session.

Once they enter the received OTP, the transaction will be sent for authentication and the merchant website will allow users to access their merchant account. 

If you are running a small business and want to prevent online spamming from fraudsters then OTP verification would be quite helpful for you. This technology allow you to communicate securely by authenticating the identity of the users.