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Why is OTP important for e-Payment transactions?

Why is OTP important for e-Payment transactions?

What is OTP?

OTP, also known as One Time Password, is a set of one-time passwords that the system creates to secure transactions on the Internet by sending them as an email, SMS, or send to an application to verify account ownership. Most of them are 6-digit numbers or letters with a very short duration of minutes. If you enter the wrong code or enter it later than the specified time, your login will not succeed.

As mentioned, with the OTP code constantly changing, it has a short period of time that can be used once. Therefore, it can secure account access or online transactions.

Why do we have to use OTP

  • To verify our identity before using the services. For financial transactions, e-wallet banking, transfer/payment, and credit card access require security. OTP encryption authenticates the user’s identity by sending the code to a number or email address registered with that company.
  • Prevention of theft and login smuggling. OTP it’s a code that can only be used once and for a limited period, so reusing or hacking is very difficult.
  • For user convenience. Many people often have difficulty remembering passwords for each system. If OTP is implemented, you don’t have to try to memorize passwords anymore because each login gets a unique OTP and it’s easier to fill in. Once you get the OTP, you can immediately fill in. Many people have forgotten the password or set up the same password for every app. If you set it differently, it may cause you a headache. Therefore, using OTP or One Time Password is both a security and convenience option.

How to prevent from being fooled and being stolen the OTP

  • Don’t be fooled by links attached to SMS messages, email, websites, social media or chat programs and never open links attached.
  • Do not disclose personal information through all forms of requests. If you are unsure about the service channel, contact the service provider yourself.
  • Use the notification service in the Mobile Banking app to monitor account movements at all times.
  • In case you are being fooled and disclose information or passwords already, contact the service provider’s bank to change the password immediately.

Another popular format is Email OTP

OTP email is a set of one-time passwords that the system creates for secure Internet transactions. When we want to make a transaction, such as payment, money transfer, or online access to financial accounts, the system sends an OTP code to the email and customers can copy it in for authentication. Although email OTP is not as popular as SMS OTP, many businesses are still using it. Sometimes we find that authentication is available to choose between sending OTP code to a phone number (SMS) or email address, which is also convenient for customers.

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