A one-time password (OTP) also known as a one time PIN, one-time consent code (OTAC), is a passcode that can just be used for one login session or transaction, and you’ll be able to insert this code into a computer system or another digital device. OTP eliminates shortcomings that are associated with traditional (static) password-based authentication. These days, a lot of web-based applications also include two-factor verification in order to safeguard their user’s privacy and personally identifiable data.
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OTP addresses the issues involved with static passwords. One time passwords are not vulnerable to any cyber-attacks. This means that an intruder that manages to capture an OTP and uses it to login as a user or even perform a transaction will be unable to use it again since it will no longer be applicable after one login attempt.
What is the meaning and full form of OTP?
OTP stands for a one-time password. A one-time password (OTP), also referred to as a one-time pin, is a password, and this can be used for one login session in an application or in a computer system/another electronic device. It is an immediately created numeric or alphanumeric string of characters that authenticates a person for one login session. An OTP provides much more protection than a static password. This is especially true if the user-created password is weak. And it can be used again and again across numerous accounts/devices. OTP will change your authentication parameters and login information for every login session, and it can be used to include another layer of protection to all of your accounts and devices you use to log in on a regular basis.
Also Read: How to Check Bank balance Online From Home
What is the use of OTP verification?
OTP must be utilised as another layer of verification factor for all of your regularly used accounts and devices. Usually, it's a type of password that can be numeric/alphanumeric. And it certainly protects your personal information and privacy.
Multi-Factor Authentication (MFA ) can also be used to protect your accounts, devices, your privacy, and your personal data. When you use either of these two, you will be able to protect your accounts/devices from unauthorised access.
You need to use a mixture of these two methods if you want to protect access to your private information.
How is OTP Helpful in Banking?
The one-time password (OTP) is a critical aspect to keep in mind when making money and big transactions on online banking. OTP is a six-digit numerical code that is sent through SMS to your subscribed mobile number while making a transaction. This password is used to verify that you are the actual owner of the account you are trying to transfer money. This is a reliable password mechanism that is currently used during credit card and debit card transactions. This OTP is a secret login token that shouldn’t be shared with anyone. OTP is mandatory for authorising the authenticity of the account holder. OTP is also a time-sensitive password that is randomly produced and delivered to your authorised mobile number. After a certain time (mostly 5 minutes), it’ll become invalid.
How is Single Factor Authentication different from two-factor authentication?
The terms two-factor authentication and one-time password are often used synonymously by industry leaders. This is incorrect. There are noticeable differences and also dependencies involving these two terms. A two-factor verification, as the name suggests, requires a second factor to your regular password system. Although you use a username and 2 different passwords to log in to your account, you may not get the necessary safety from unauthorised access. To avoid this scenario, you can use a one-time password.
Is OTPs Safe?
Because there is no such thing as 100% safety and anything may be hacked, we cannot say that OTP is an ideal security mechanism. You’ll receive it on your phone, and you can put it to use just for one transaction/login session. Once you've completed the session, the code won’t work for another one.
How is OTP created?
OTP generation algorithms typically take advantage of randomness or pseudo-randomness. Some will consider time-synchronisation, while other generators utilise mathematical algorithms. Time-based OTP (TOTP ) algorithm generates a password based on an existing time-stamp, shared key, or It may be something different to every account. The Time-based one-time password algorithm (TOTP ) is an algorithm that generates a one-time code from the provided key plus the time stamp. You can find it being used in many two-factor authentication mechanisms in the coming days.
We hope that the details of this article would have given you a clear overview of OTP and how it is being used in various sectors in order to minimise fraudulent activities. An OTP that you can only use once, and then it expires. A one-time code frequently consists of an alphanumeric code and is generated for a single login session.