Wouldn’t it be great if there were a foolproof way to verify that you’re talking to the right person in a business setting where fraud is all too common? Our need for identity and data protection verification solutions grows as we live more and more online. One-time passwords (OTPs) are a practical way to safeguard users worldwide. A one-time password, or one that expires after a certain amount of time, is more secure than a permanent one. Most of the time, OTPs are sent through SMS, apps, or email, and they work against common online threats. Read further to get to know more about one time password; the generators and authentication. Enjoy the ride!
What Is a One Time Password?
For maximum safety and protection against hacking attempts, many websites and services now require users to enter a unique “one-time password” (OTP) each time they log in. It’s an automatically generated string of letters or numbers that is delivered to the user’s phone as an SMS, voice message, or push notification.
When unique conditions arise, such as verifying the legitimacy of a transaction or authenticating a new account, the OTP has emerged as the global standard for permitting a login. One-time passwords, one-time authorization codes (OTACs), and dynamic passwords all refer to the same thing: a random six-digit number supplied to a client’s phone via SMS text message and then entered by the consumer into a website or app to get access.
Types of One Time Passwords
The following are the types of One Time Passwords:
#1. Hash-based OTP (HOTP)
This one-time password (OTP) method uses a hash technique to produce and send a code that changes in tandem with a counter that is updated each time the user logs in.
#2. Time-based OTP (TOTP)
This particular kind of OTP is time-based since it gives a window of validity for the OTP code. Timesteps are typically between thirty and sixty seconds long. The user has to request a fresh OTP code if they don’t enter it within the allotted timeframe.
How Does a One-Time Password Work?
During a single login session or transaction, a one time password generates a special, time-limited code.
This is how it usually operates:
#1. Making an OTP request
The system asks a user to input their username or identification whenever they try to log in or carry out a sensitive operation.
#2. Generating the OTP
The system then produces a one-time password (OTP) using a counter (HMAC-based OTP) or the passage of time (time-based OTP).
#3. Mode of Delivery
The user receives the OTP via a pre-arranged channel, like an SMS, voice call, email, or mobile app.
#4. User Contribution
After receiving the OTP, the user enters it into the application or login screen.
#5. Validation
The system confirms the authenticity of the entered OTP and determines whether it corresponds with the one generated for that particular session.
#6. Quick Use
A predetermined time interval or successful usage of the OTP renders the code invalid, preventing its repetition.
#7. Enhanced Security
The system adds an extra layer of protection by requiring the dynamic OTP in addition to the standard password or PIN. This lowers the risk of password-related attacks and protects against unauthorized access.
How Does a User Get a One Time Password?
Obtaining an OTP code is a simple process for the end user, making the process safe but simple. This is a typical situation:
- A client tries to use their phone to access their online banking account.
- They cannot use their device with the bank. They offer to send a verification code by email, text message, phone call, or push notification in order to safeguard the user’s information.
- The customer receives an OTP key in a matter of seconds after choosing their preferred delivery method.
- The user continues with their login, providing their ID and password in addition to the key. They are free to use every feature available for internet banking.
To produce and deliver that one-time passcode to the customer’s screen, a variety of magical processes took place behind the scenes.
One Time Password Generators
There are various ways to generate OTPs, and each has unique security features and methods. The following are some One Time Password generators:
#1. Time-Based OTP (TOTP)
- Using the time of day and a shared secret key between the server and the user’s device, TOTP provides authentication.
- Using a cryptographic procedure such as HMAC-SHA1, the secret key and the current time are hashed to create the OTP.
- Since TOTP is time-synchronized, both the user’s device and the server need to have precisely set clocks.
- This is often used to make OTPs in mobile apps like Google Authenticator.
#2. HMAC-Based OTP (HOTP)
- OTPs are created by HOTP using a counter and a secret key that is shared between users.
- The counter is increased, and a new OTP is produced each time an OTP is used.
- The counter value on the user’s device and the server must be in sync with one another.
- Hardware tokens and authenticator apps frequently employ HOTP for authentication.
#3. Random Generation
- Using a secure cryptographic random number generator, some systems create OTPs randomly.
- Users can receive their OTP via text message, email, or another channel.
- Temporary use can be guaranteed by combining random generation with a time limit.
#4. Challenge-Response OTP
- The server in a challenge-response system delivers a challenge to the user’s device in the form of a random number.
- The OTP is calculated by the user’s device using the challenge and a secret key.
- The server receives the computed OTP back for validation.
#5. OTP by SMS
- Users can receive OTPs via SMS messages, third-party services, or a centralized SMS gateway.
- The user enters the OTP for authentication as soon as they receive it.
#6. OTP by Email
- Users can receive OTPs through email.
- To finish the authentication process, the user enters the OTP from the email.
The Advantages of a One Time Password
The following are the advantages of a one time password:
#1. OTPs Have a High Degree of Client Familiarity
One-time codes are widely used for a variety of purposes, such as changing a password or activating a bank card; thus, very few individuals require instruction on how to use them. The vast majority of people who require an OTP may easily obtain one because there are now more than twice as many cell phones as people.
#2. Put an end to identity thieves’ activities
When companies use one-time passwords (OTPs) for user authentication, it becomes much more difficult for hackers to get into the accounts of their clients or staff members and steal personal data.
When an unregistered device is used to access an account, verification messages might also be sent to the user’s registered email address or mobile number. The account holder can quickly and simply flag any odd activity with a single click if necessary.
The user has total control, and their account is not locked at any hint of questionable conduct, which would be incredibly annoying if the action was valid every single time. Furthermore, these warnings help businesses gain customers’ trust by informing them that they are actively monitoring and safeguarding their personal data!
#3. Attacks in replay
The password and other authentication information for a user are stolen in a replay attack. The attacker would now gain access to that user’s account if the password was static. However, if an OTP is used, the password that the hacker stole is rendered invalid because it was previously used once to get into the user’s account and cannot be reused.
#4. Multi-factor authentication
OTPs have the ability to add another level of security. Security can be strengthened and the chance of a breach decreased by generating One-Time Passwords (OTPs) for users to offer as an extra form of authentication.
#5. Gives your IT support a break
Each of us has numerous usernames and passwords that we need to keep in mind. Not everyone has forgotten at least one. Keeping track of all that information, from the streaming service account to the subscriptions to online newspapers, is no easy feat.
Humans tend to forget things. If there are no other ways to verify identities, customers will have to contact customer service or IT personnel to get back into their accounts, which takes time.
#6. Superior Technology Guarantees Maximum Dependability
While there is a small chance that an SMS-sent One-Time Password (OTP) won’t arrive within the allotted few minutes, the vast majority of OTPs arrive promptly. Even if the delivery fails extremely rarely, the consumer might request a new OTP.
#7. OTPs Fulfill a Variety of Situations
There are several applications for OTPs. Although they are most prevalent in the financial industry, they are becoming more and more frequent on all kinds of websites and applications where it is necessary to verify a user’s identity or access privileges. OTPs work on the same premise as the “multiple factors” of TFA and SCA, which is to say that they increase the level of security already present in the process.
If a customer’s account has multi-factor authentication enabled, then even if a malicious actor has access to the user’s email and password, they still wouldn’t be able to log in without committing further crimes, such as stealing the customer’s mobile device.
Challenges and Security Concerns of One Time Password
Despite the benefits of one-time password authentication in terms of security, the technology is not without its drawbacks. The following are the challenges of One Time Password:
#1. Problems with Delivery
Depending on the network or spam filters in place, OTPs sent by email or SMS may reach slowly or not at all. This may irritate users and make the authentication procedure more difficult.
#2. Phishing Occurrences
Even though OTPs are immune to conventional phishing attacks, skilled hackers can nevertheless deceive users into entering OTPs by pretending to be authentic OTP prompts or using social engineering tactics.
#3. Attacks by “Man-in-the-Middle” (MitM)
Attackers may be able to intercept OTPs in some situations when they are being transmitted between the user’s device and the server, particularly if the communication links are not secure.
#4. Attacks using Replay
An attacker may be able to obtain unauthorized access if they are able to intercept and reuse an OTP during its validity period.
#5. Theft or Loss of Tokens
When it comes to hardware tokens, an attacker might be able to access the user’s accounts using the OTPs in the event that the token is lost, stolen, or deactivated.
#6. Reliance on Mobile Technology
Many users of mobile-based OTPs require their mobile devices to be with them for authentication, which isn’t always practical or possible.
#7. Issues with Synchronization
The clocks of the user’s device and the server need to be in sync for time-based OTP (TOTP) systems. Authentication attempts may fail in the event of any disparity.
#8. Attacks known as denial of service (DoS)
Attackers might try to overload the authentication system with a large number of unsuccessful OTP attempts, which would disrupt service or exhaust resources.
#9. Limited Capability to Utilize Offline
It might not be possible to use OTP authentication when users have spotty or nonexistent internet access.
#10. Challenges for Password Resets
A user may have trouble accessing their account again if they rely just on OTP authentication and forget their password.
#11. Adherence to Regulations
OTP security may also need to meet certain rules and compliance criteria, which vary depending on the business and region.
How Come a One-Time Password Is Secured?
In reality, there is a surprising amount of technology involved in delivering an OTP to a customer’s mobile device, despite their apparent simplicity. Despite not being encrypted while in transit, OTPs transmitted over SMS employ additional security measures to guarantee that only authorized users can access them.
OTPs Adhere to Tested Best Practices
Strong Customer Authentication (SCA) and Two Factor Authentication (TFA), two popular login security models, take the stance that several factors, each insecure on its own, can work together to allow substantially stronger security. These procedures are common throughout the whole security sector and are not exclusive to OTP.
Multi-Factor Authentication’s Factors
Essentially, these models integrate personal information (e.g., a smartphone) with personal knowledge (e.g., an email address) and/or identity (e.g., a parent’s place of birth) through challenge questions. When combined, a personal device, an OTP—a semi-random access code—and a brief window of time to enter it meet a number of use cases for safe login.
What Distinguishes a 2FA From an OTP?
In addition to its use as a secondary or multi-factor authentication method, one-time passwords (OTPs) can function on their own as a standalone security mechanism by requiring a unique OTP for each login. As a result, these terms shouldn’t be used interchangeably because OTP is merely one of several 2FA/MFA implementations and can function independently as a security solution.
Is a Static Password Less Secure Than an OTP?
Indeed. Static passwords gain an extra security layer from OTPs. In 81% of security breaches, passwords alone are a weak means of identity verification. Increasing the level of authentication on passwords guarantees increased security. Of course, becoming passwordless would allow you to do away with passwords completely.
Which OTP Is Most Frequently Used?
The Time Based One Time Passwords (TOTP) method of Time Synchronized OTP generation is the most popular method for the generation of OTP described by The Initiative For Open Authentication (OATH). Time is the most important aspect in these OTP systems in order to create a one-of-a-kind password.
Is it Possible to Predict the OTP?
But in contrast to conventional passwords, OTPs are not able to be predicted. Since every new string of characters generated by OTPs is random, it is unlikely to contain information that can be guessed with ease, such as a user’s birthdate or pet name. Furthermore, it is not possible to predict the passcode for the future from previous examples.
Without an OTP, Can Someone Use My Credit Card?
You can file a dispute with the bank over compromised card information and have the card blocked right away if you get an OTP on your phone and there are no outstanding payments. Consider it an additional security measure. You can be sure that nobody can use your card without an OTP, even if it gets lost or stolen.
Creating Encrypted OTP Codes
There is no list or long-term storage of the PIN that appears on a customer’s phone. The method of generation is the same as that used to create the cryptographic keys that safeguard bank accounts: it is a “one-way hash function” that involves creating and multiplying big prime numbers. One important aspect of this approach is that, while these codes are quite simple to create, it is nearly impossible to “backtrack,” or figure out how the code was created by examining the outcome.
As a result, the OTP that customers see is actually unexpected. A malicious actor may possess lists of millions of OTPs, but he couldn’t use a “pattern” to forecast which OTP will be generated for a particular client in the future.
OTP Usability Is Time-Limited
An OTP’s limited shelf life—rarely more than 30 minutes, and perhaps only a few minutes—adds to its security posture. Stated differently, the scenario they address is highly time-sensitive. It’s the client trying to log into his account while seated at his desk or the client verifying her payment is valid while in front of the sales counter.
This is an additional benefit of SMS compared to other methods. Though instant messaging was not the primary purpose of SMS, most international mobile networks can send a text message from the sender to the recipient in a matter of seconds.
OTPs Are Also Single-use Only
one-time passwords can only be used once. They become invalid after a certain amount of time, and even during that window, the same OTP cannot be used to log in more than once; this is referred to as “non-replay.” However, this time constraint renders the hacking of OTPs nearly useless, even if this were possible.
What is an OTP Service Provider?
When businesses need to create safe authentication for their users, they often turn to a specialized company or service known as an OTP Service Provider.
These suppliers guarantee a smooth and safe authentication procedure by providing the infrastructure, instruments, and knowledge needed to create and transmit OTPs to end users.
What Is Identity and Access Management?
The concept of identity and access management (IAM) encompasses a set of security protocols and tools that guarantee appropriate entities can access resources at the appropriate moment.
Building and upholding trusted digital identities is the foundation of identity and access management (IAM). Using IAM, businesses may verify the identities of individuals and groups and then provide them with authorized access to the appropriate systems. Additionally, adaptive risk-based authentication, which offers a step-up challenge when circumstances call for it, maintains trust over time.
How to Send One-Time Passwords?
Using OTPs does not require access to a mobile network. OTPs are provided as a service by companies like CM.com, which also offers a secure platform for sending OTPs via text message or other channels, receiving OTP requests, and confirming that the OTP was input correctly so the transaction might proceed.
Through the use of an API, the one-time password infrastructure is integrated with your website or application. A website uses protections such as verifying that the OTP entered is inside the time window to determine whether or not it is correct. The company uses an OTP service provider like CM.com rather than the software it developed internally when you receive an OTP to log into your bank account or complete a transaction.
Final Thoughts
Getting to know everything about One Time Password is very important and I hope this article was helpful. Let’s hear from you in the comment section below!
- TOTP: What is a Time-Based One-Time Password?
- How Do You Password Protect an Excel File: Explained!
- WHAT IS A PASSWORD: Definition & What It Is Used For
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