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    Two-factor authentication (2FA) has become the norm, not just for financial transactions but across various verification/authorisation needs. For instance, if you try to log in to your Amazon account from an unrecognised device, you might need to re-authenticate yourself using SMS OTP verification. This is true of email, social media accounts, e-wallets, streaming platforms etc. as well.

    This form of user verification is an important way of preventing fraud and protecting customers from misuse/abuse of their information. During present times, when hacking of online applications and theft of confidential information like passwords and PINs are happening every day, 2FA adds another layer of security. In India, the most common form of 2FA is SMS OTP verification. 

     

    What is SMS OTP verification?

    OTP or One Time Password is a temporary authentication code sent via SMS to a user’s registered mobile number. When a user logs in to an app or makes a transaction online, the system will automatically generate and send an OTP. Only when the user enters the right OTP within a stipulated time frame will they be allowed to login/transact. This prevents unauthorised use or fraudulent transactions before they occur.

     

    Who uses SMS OTP verification?

    Typically, OTPs are associated with the banking and financial services sector. Before any transaction, OTPs are used as a means of user verification. But that is not the only use for OTPs, though. Some of the other uses are:

     

    • Registrations: Preventing fake IDs/users by authenticating them during signup itself
    • Resetting passwords: Ensuring fraudulent entities don’t change the passwords of your users
    • Account reactivations: When a user has been dormant for an extended period, you can request them to re-authenticate themselves via OTP
    • Login from unrecognized devices: When a user logs in from a new device or location or IP, you can request them to verify their identity with OTP
    • High-value delivery: E-commerce players ask customers receiving pre-paid deliveries of high-value items to verify themselves with OTPs

    Why is SMS the best medium for OTP verification?

    For customers, SMS is one of the simplest ways of authentication. Almost everyone has a mobile phone that can receive text messages. SMSes are easy to use and free to receive. The technology has been around for over 25 years, and most mobile phone users are comfortable using it. For enterprises, too, it offers several benefits.

     

    Security: Unlike passwords, SMS OTPs are temporary, protecting customers from abuse later. As they are sent to a user’s registered mobile number, it is unlikely to have been intercepted on the way.

    High delivery rates: When using SMS OTP verification, you can rest assured that the codes are delivered. We ensure over 95% delivery rates for our enterprise clients.

    Low latency: SMS OTP verification is almost instant. Exotel’s SMSes are delivered in 3-8 seconds on average.

    High read rates: Unlike email, app notifications or other forms of 2FA, SMS are read more, especially while awaiting an OTP.

    How does SMS OTP verification work?

    1. User requests to verify by clicking on the ‘verify’ button on your website or app. A unique OTP is generated in your backend system.

    2. Exotel fetches the OTP and sends it to your customer’s registered mobile number via SMS

    3. User enters the OTP sent by Exotel on your website or app to get verified instantly

    How to set up an automated SMS OTP process?

    Exotel offers an easy-to-use API that connects with your backend applications to automate OTP delivery effortlessly. Our SMS API allows you to send text messages using code. You can trigger SMSes on autopilot based on predetermined conditions. 

    For example, if you’re sending OTPs for login, you can program Exotel to send an SMS every time they click on your website’s ‘send OTP’ button. This will then send an HTTP POST request to Exotel to trigger the SMS. 

    For more about how you can use Exotel’s API.

    How to choose the right SMS OTP verification provider?

    There are several SMS providers in the market, but not all of them might be suitable for a business-critical use case like 2FA. While choosing an SMS OTP verification provider, consider the following aspects.

     

    System uptime: Your customers should be able to transact at any time of the day. This means that your provider must be able to send SMSes 24×7 automatically. They also need to have a world-class uptime to ensure SMSes are always delivered. Exotel offers 99.94% uptime with high availability of data stores for messaging. 

    High delivery rates: Your verification will be effective only if SMSes are delivered on time. So, while choosing an SMS provider, ask whether they have tie-ups with all the major telecom providers and access to high-speed telecom routes. Exotel offers 95% delivery rates with latency as low as 3-8 seconds.

     Failsafe mechanisms: A good SMS provider should also have a strategy to overcome delivery failures. This means that they need to have multiple SMS routes in case one of them fails.

    Security: Authentication systems like SMS OTP need to be secure. Check if your provider has the credentials and certifications from industry bodies. Exotel uses an ISO 27001:2013 certified information security management system.

     Scalability: As your business grows, your SMS provider should be able to deliver as many SMSes as you need. A cloud-based telephony provider like Exotel will enable dynamic scaling cost-effectively.

     Ease of use: The key to effective OTP verification is integration. Choose an SMS provider that has robust APIs and integration mechanisms to ensure continuity of service.

    Documentation: Technology integrations are not easy. Choose a service provider who has extensive and well-documented APIs to prevent glitches in the future. 

    Customer support: As a high-volume ongoing activity, you need a service provider who is available to answer your questions and solve your problems when you need. Exotel offers multilingual support 24×7 for any queries you might have. 

    Choose Exotel for SMS OTP verification

    Exotel is one of Southeast Asia’s largest cloud telephony companies. Our SMS services and APIs are designed to give you best-in-class verification services. Our offerings include:

    • Dedicated SMS routes for uninterrupted delivery 
    • Delivery to DND numbers too (TRAI-mandated DND rules do not apply to OTPs)
    • Real-time metrics like open, delivered and response rates
    • Dynamic scaling based on your needs
    • Pay-as-you-go model with complete transparency

    Sign up now for a 7-DAY free trial.

    Manisha Mishra

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