What is OTP?
A One-time password (OTP) is a unique, temporary code that is used for a single transaction or sign-in session. Unlike traditional passwords, which are static and remain the same until changed by the user, OTPs are dynamic and expire quickly after their issuance, usually within a few minutes. This dynamic nature makes OTPs significantly more secure because they greatly reduce the risk of unauthorized access even if the OTP is intercepted by malicious parties.
OTPs are typically generated using algorithms based on time synchronization or mathematical computations, ensuring that each code is unique and unpredictable. Users often receive OTPs via SMS, email, mobile apps, or hardware tokens.
What are the common use cases of OTP (one-time password)?
Here are some of the primary uses of OTPs:
Password-less sign-in
Many websites and applications now offer password-less sign-in options to enhance security and user convenience. Users can request an OTP sent to their registered mobile number or email to authenticate their identity, without the need to remember complex passwords. This approach not only simplifies the sign-in process but also reduces the risk of password-related breaches.
Password recovery
In instances where users forget their passwords, OTPs serve as a secure method for account recovery. Users can request an OTP, which is sent to their registered email or phone number, to verify their identity before resetting their password. This process helps ensure that only the legitimate account owner can perform the recovery.
Multi-factor authentication (MFA)
OTPs are a vital component of Multi-Factor Authentication (MFA), which combines something the user knows (like a password) with something the user has (like a mobile device). After entering their primary password, users receive an OTP that they must enter to gain access. This added layer of security significantly reduces the likelihood of unauthorized access, even if the primary password is compromised.
Sensitive transaction confirmation
For activities that involve sensitive data or significant transactions, such as online banking or making high-value purchases, OTPs serve as a security measure to confirm user consent. Before completing these actions, an OTP is sent to the user’s registered contact method, which must be entered to finalize the transaction. This ensures that even if someone gains access to the user’s account, they cannot perform critical actions without the OTP.