OTP authentication offers extra security in different industries, so it is a fairly widespread method.
Although the banking sector is the one that most uses this form of authentication, we also find it on social platforms, online stores, email … Giants such as Google, Microsoft, Amazon, Facebook, etc. rely on this type of authentication to ensure that a user is who they say they are.
Static passwords are not strong. In recent years, we have seen that cybercriminals are capable of checking billions of password combinations, spoofing the identity, improving malware, etc. to impersonate an individual and access her accounts.
That is why more and more websites and apps ask their users to add a layer of security to their accounts. And this is when the OTP key comes into play, take 8 minutes to understand it.
Índice
1) What is the OTP key?
Even if you have not heard about the OTP key, you have probably used it to buy online, to confirm transfers and payments, to access social networks, to enter in your email, etc.
As it can be deduced from its name, the OTP key or “One Time Password” is only valid just once to log into a network or service. It is also known as a “dynamic password” because it varies.
Unlike static passwords, varying passwords such as OTPs make unauthorized access difficult and are only accessible to their owner.
The algorithms for generating OTP keys are random and encrypted, so they are very complicated to reverse and therefore difficult to obtain, which makes them more secure. They are usually composed of series of numbers, letters or both, generated for a specific operation.
In addition, they have a limited duration and if they are not used within the allotted time, they expire and can no longer be used.
Recapping. A one-time password is a password that …
- Expires in a matter of minutes
- Cannot be used again
⚠️⚠️⚠️ Did you know …?
One-time passwords are generated differently depending on the country. For example, in developed markets such as Europe, North America, Australia or Singapore, the OTP code is not usually sent by SMS.
Important: “OTP key” is not synonymous with “2-step authentication”
There is a lot of confusion surrounding these two concepts, often used synonymously.
A two-factor authentication, as its name suggests, is a type of authentication in which two forms of unlocking are used. One of them may or may not be an OTP key.
Usually, in the processes of two-factor authentication, OTP keys are used as a second factor.
But OTP keys can be used in other authentication and/or verification processes as an autonomous security mechanism.
2) When and where are OTP keys used?
With the growth of online transactions, fraud has also increased -criminals go online-.
Companies demand protection to secure their clients’ information against any type of cyberattack. Hence the need to develop more comprehensive security and user protection practices.
The OTP key arises to respond to this need to expand levels of security and protection in, for example, online purchases or in banking operations.
One-time passwords are usually used as part of a multi-factor authentication ( MFA / 2FA). This mainly applies in financial services (especially following the requirements of the PSD2 directive ) and is increasingly common to secure access to business applications and corporate networks.
One-time keys are used in industries and sectors that deal with sensitive data, such as:
- Online banking and financial services
- Administrative services
- Health services
- Online commerce and travel
- Etc.
3) How do one-time passwords work?
One-time passwords have a simple operation: they are activated when carrying out an online transaction .
When the user initiates an operation in a certain service, receives an SMS, call, email, etc. with a password (provided by the OTP generator), which he must enter to log in.
The operation of these keys depends on two elements:
- First, the OTP generator is in charge of providing the user with the temporary password
- Second, the authentication server starts a Once the OTP generator has provided the unique password to verify that it is correct
Obviously, you must ensure that the generator and the server are fully synchronized to validate the OTPs.
It is a very safe and efficient system , since this code offers a single use and is activated for a relatively short period of time . After that time, if the client has not entered the password, it stops working and must be requested again.
Additionally, the risks involved in storing a password with the web service provider are minimized. In the event of a security breach, attackers would not be able to capture sensitive login details.
4) Advantages of one-time password authentication
When it comes to authenticating our identity and stating that the person performing an online action is legitimate, OTP keys offer the following advantages:
- Greater trust and security for the end user
As we have been reiterating throughout the post, the client is the only person with access to their OTP code. He can navigate and perform the operations he needs with the peace of mind that, for example, no one else has access to his online banking.
This avoids common problems related to static password security, such as weak passwords, reuse of the same password across multiple accounts and systems, shared credentials …
- Protection against fraud and identity theft
Securing personal information and login details with advanced security methods is the best measure to protect users against identity theft.
OTP keys are only available for a short time and are not used for future actions, making attacks and fraud more difficult.
- Improved user experience
The OTP key offers greater protection and does not require any effort on the part of the user – on the contrary, it relieves him of the “burden” of remembering numerous passwords -.
- Resource optimization
Although the deployment of OTP requires the integration of the appropriate technology, in the long run supposes a saving and optimization of resources
Round of questions
What are the disadvantages of OTP keys?
The main disadvantages of OTP keys are related to technology, so they involve the code provider more than the end user.
Adding single-use keys involves the integration of additional technologies and requires specific resources. In addition, it can happen that the security tokens fail or fail at some point, which will prevent the user the use of the service he has requested.
Why are one-time passwords safe?
Because, in theory, only its owner has access to it, because it can only be used once and because its use is blocked after a while.
Join our community so you don’t miss a thing!
See all posts 
