Technology & Roadmap

SMS Verification Number: What it is, How it Works and How You Can Use it for Your Business

  • June 29, 2022
  • 4 mins read

In 2021, Indian customers made over 44 billion digital payments, a 3x growth in just three years. (Source: Statistica) Across e-commerce, digital products, vaccination, online delivery, ticket booking, OTT usage, etc., customers have millions of digital interactions every single day. Parallel to this growth is also the rise in cybercrime — reports show a 4x increase between 2016 and 2020. (Source: BusinessStandard)

One of the simplest, quickest and most user-friendly ways for businesses to protect themselves and their customers from cybercrime is the humble one-time password (OTP), using an SMS verification number. Various kinds of businesses use it in myriad ways. This blog post discusses what it is, how organisations use it, are using it and what you need to look for while setting up an SMS verification number.

What is an SMS Verification Number?

An SMS verification number is a virtual, 10-digit, cloud-based phone number that lets you send text messages to users. With a good SMS verification number provider, you can mask the 10-digit number with a sender ID, reflecting your brand name, for your customers to recognise your messages instantly. 

How do SMS verification numbers work?

Customer raises verification request: Customer clicks on the ‘verify’ button on your app or website. This can also be ‘login with OTP’ or ‘confirm with OTP’ based on what the customer is authenticating themselves for. Then, your backend system generates the OTP.

Exotel performs the verification: Exotel fetches the generated OTP and sends an SMS to your customer’s registered mobile number.

The number is verified: Your customer enters the unique OTP sent by Exotel on your app or website and gets verified instantly.


How do Businesses use SMS verification?

The most common use case for SMS verification is in financial services, especially after RBI’s mandate on two-factor authentication (2FA) for all online card transactions. But, in addition to that, there are dozens of ways businesses use SMS verification and OTPs. We explore a few of them below.


  • Transaction verification 

Whether it’s an online purchase, recurring payments, credit card bills or other transactions, Verification through SMS is the best way to go about. To ensure that the person making the transaction is the cardholder, send an SMS OTP to their registered mobile number and authenticate them instantly. 

  • Authorisation

There is a need for security of access far beyond financial transactions, such as logging into secure websites/mobile apps from an unrecognised device or a different location or IP. In fact, many net banking websites require OTPs as part of their 2FA to even log in because SMS verification is a simple, secure way to ensure that the user is authenticated correctly.

  • Password reset

If a password is the primary means of logging into any platform, it is critical to prevent fraudulent access and ensure that only the account owner resets the password. Businesses use SMS verification to ensure the authenticity of the user. When a user requests a password reset, an OTP can be sent to their mobile number first to verify themselves and only then be redirected to the password reset page.

  • Passwordless login

Remembering passwords for every website or app a customer signs up for is tedious. So instead, SMS verification allows them to log in without a password. ‘Login with OTP’ is gaining popularity among a wide range of customers who want the convenience of access without the hassle of a secure password.

  • New signups

It is common for businesses to get fake signups or wrong mobile numbers from their websites. This creates a large database of unreachable customers, wasting time and energy. Businesses use OTPs at the time of sign-up. By requiring the user to confirm their mobile number, you can ensure it’s accurate and in use.

  • Account reactivation

Like password reset, account reactivation is also a use case for leveraging OTPs to prevent fraudulent access. Often, when an account is inactive for long, miscreants try to activate it for their fraudulent activity. On the other hand, businesses also regularly send marketing messages to dormant users inviting them to continue using the product, needing reactivation. Either way, authentication is critical, and OTP verification is a user-friendly way to achieve this.

  • Order confirmation and delivery

Some deliveries like high-value orders, credit cards, return pickups etc., need an additional layer of security at the customer’s doorstep. OTPs are a great way to confirm that the order is being delivered to or picked up from the right person in real-time.

How to Choose the Right SMS Verification Number?

While there are multiple providers in the market for SMS verification numbers, not all offer the same benefits. So, before choosing the one that’s right for you, consider the following.


  • Choose an SMS verification number that reflects your brand

Customers today expect to know who the messages are coming from instantly. The sender ID, which replaces the 10-digit number as the sender’s name, is designed to serve this purpose. Choose a provider who can give you a six-character sender ID that reflects your brand.

  • Ensure Truecaller verification 

With more than 100 million active users in India alone, Truecaller is popular as a tool to identify and eliminate spam. (Source: Truecaller) While choosing an SMS verification number, make sure that Truecaller can verify it. Exotel’s partnership with Truecaller enables you to verify your number in just a few simple steps.

  •  Check the delivery rates

Your customers must be able to verify their identity or transact securely at any time of the day. Choose a service provider that offers high uptime, scalability and deliverability. At Exotel, we ensure a 95% delivery rate and our SMS OTPs are delivered within 3-8 seconds on average.

  •  Check for compliance 

To avoid non-delivery of your OTPs, choose a number for SMS verification that complies with Telecom Regulatory Authority of India (TRAI) guidelines and Distributed Ledger Technology (DLT) template scrubbing. Exotel ensures that you can easily comply with all these guidelines and will offer assistance each step of the way. 

  • Make sure you have real-time visibility 

Once you start sending SMS OTPs, you need to monitor the performance of these messages. For this, you need to analyse different metrics like delivery, open and click rates. With Exotel, you can measure such real-time metrics right from your dashboard.

You can use this information to try and test different strategies to improve your results. For instance, if your reports reveal that many customers request an OTP twice, you could try increasing the expiry time on the first OTP message sent to them for a better customer experience. 

When interacting with your customer through a digital channel, you need to consider security, ease of use, and customer experience. The OTP checks all these boxes and more to deliver meaningful business value. For example, Zivame reduced fake orders using SMS verification for order confirmation.

See how you can leverage SMS verification for your business. Speak with one of our agents today! 

Manisha Mishra

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