SMS OTP has been one of the most widely used authentication methods for years. It is familiar and not hard for users to understand, and that is why it is widely used. When using it, users just receive a short code on their phones, enter it on the app or website and the verification is completed.
However, in terms of simplicity, SMS OTP is no longer the best option. SMS was not built to be an authentication channel, and not even as a security first communication channel. It depends on telecom networks, phone numbers, mobile carriers, and delivery systems that businesses do not fully control.
As fraud becomes more advanced, this dependency makes SMS OTP a weak point, especially for platforms that handle financial accounts, sensitive user data or high-value transactions. In this article, we are sharing reasons SMS OTP should be used with other authentication methods.
Why SMS OTP Is No Longer Enough Alone
SMS OTP Is Vulnerable to SIM Swap Attacks
One of the biggest problems with SMS OTP is that it depends on the user’s phone number. If an attacker controls the number, they can receive OTP codes directly and hack all the user’s accounts that authenticate using SMS OTP.
This is called a SIM swap attack. An attacker contacts the mobile carrier, pretends to be the real owner of the number, and asks to transfer it to another SIM card. Once it is done, the attacker receives calls and SMS messages, including OTP codes.
Vulnerability to Phishing
SMS OTP is also vulnerable to phishing. This happens when attackers create fake login pages that look similar to the real website or app. The user enters their username, password and OTP code. The attacker captures the real code instantly that the user enters in the fake page and uses it before it expires.
In this case, the OTP worked exactly as designed, but the account was still compromised. This is one reason businesses are moving toward diversifying authentication methods to include ones other than SMS-based one time passwords.
SMS OTP Can Hurt User Experience
Security is not the only issue with SMS OTPs, as they can also affect user experience. With sometimes messages arriving late, and never arriving at other times, users can get locked out of their accounts if no other authentication method is used beside SMS OTPs.
This can be due to poor mobile coverage, dealing with roaming restrictions or facing carrier filtering, which are all out of the control of the platforms they are signing into. These issues can turn a fast login into a frustrating experience that leaves a bad impression about the platform.
Expenses Compared to Other Methods
For small products, SMS costs may seem manageable. But as the number of users grows, SMS OTP can become a large operational cost.
Every login, signup password reset, or sensitive transaction can require a new SMS message. For platforms with hundreds of thousands or millions of users, this can become a large monthly expense.
Alternatives such as face recognition and authenticator apps do not have the same per-message cost. Once these methods are implemented, users can authenticate without every login generating a telecom charge.
Final Thoughts
Businesses are relying less on SMS OTPs as a sole authentication method, adding it as part of a multi-factor authentication strategy and Authentica offers a range of verification solutions, considering the risks and inefficiencies that comes with it, which have been discussed in this article.