What Are OTPs And How Are They Beneficial for Your Business

Users’ privacy is extremely critical for most industries today especially banking and e-commerce.

This is because they involve personal information and financial transactions due to which brand take extreme precautions to increase security and prevent fraudulent activities. So much so that businesses now use top-notch security in their marketing to draw in prospects as even they are aware of all these activities. One of the most common methods brand use to decrease risk level and execute KYC (Know Your Customer) is by using One Time Passwords. Businesses have already started using SMS for transactional messages like notifications, alerts and digital receipts. Improving security will only take it to the top of the communication channels list.

Ensuring the Security at the Last Step

OTP is the abbreviation for One Time Password and they are only valid for being used once in a session or transaction long password. You might have logged in to your online banking account and the bank requested you to enter the password sent instantly to your phone via an SMS. Once you type in the correct personal info followed by the one-time password, you get access to your account successfully. Thus, this extra layer of security minimized the major risk of intruding, phishing or identity theft. Today, brands also use OTPs for marketing purposes as well along with obvious security reasons. They are a highly practical way of exchanging hyper-personalized messages to subscribers or active users for real-time campaigns.

SMS is the most common communication channels businesses use to send out OTPs due to precise delivery time, open rate and low cost. Moreover, it is also the most suitable fit for todays mobile-first consumer trend all around the world. Since we always have our mobile phones wherever we go, the verification is possible wherever we go and try to enter an online system like signing up for a social network, downloading an app or purchasing from an e-commerce store.

Benefits of OTPs

OTPs provide efficiency for quick verification needs all around the world:

1. They add a critical and additional security layer ensuring the user is valid for the next point of action on that particular system.

2. Brands can use OTPs for delivering real-time hyper-personalized offers.

3. Even though SMS is the most common and effective method, brands can send OTPs via different digital channels like emails and even notifications on social media. They can even use the channels their users prefer the most. (E.g. Voice Push Notifications)

4. Unlike static passwords, reply attacks are not applicable for intruding. There is no second-time use for OTPs, so it is pretty much useless to try the same password to conduct a transition the next time.

5. Even if a user uses the same password on different systems, OTP avoids invalid entry in critical systems like online banking. For instance, an intruder occupies the password a user uses for social media entry and online banking. Since the bank uses OTPS for checking the validation the very last step, the intruder will not be able to pass the final phase making his effort absolutely pointless.

How to Implement OTPs?

It is better for brands to connect their systems with a trustable Mass Texting Serviceprovider since OTPs require a high volume of message transition and delivery precision. They should sign up for different services on a trial basis to test the delivery of the service, the SMS gateway along with the performance (Delivery volume and timing accuracy). OTPs are an instant delivery medium, which is why brands cannot afford the latency that will lead to an angry or concerned customer especially during the first impression (testing phase) of the service.