According to a 2023 survey by the Ponemon Institute, 64% of chinese singapore phone number list organizations have not fully implemented multi-factor authentication (MFA) across their systems and applications. This statistic is particularly alarming given that research shows MFA can prevent more than 99.9% of account compromise attacks
One-time passwords (OTPs) play an integral role in MFA, 2FA, and basic account security. OTPs are a simple, yet effective way to protect sensitive information and ensure secure transactions.
This guide provides an in-depth look at OTPs and equips product managers and engineers to implement and leverage security measures that protect users and technology platforms.
What does OTP stand for?
A one-time password, or OTP, refers to unique codes generated for use in only one login session or transaction.
OTP systems generate temporary passwords for authentication. These passwords are usually a series of numbers, such as “123456”. Their validity expires after a single use. These passwords are auto-generated by a trigger and sent to the user via email, voice call, WhatsApp,or SMS.
Why are OTPs better than static password generation?
Unfortunately, it’s common for someone to use the same static password (such as 123456) for ten different accounts. However, this practice leaves all ten accounts vulnerable to breaches. Poor passwords are the root cause of 81% of company breaches; 27% of hackers get in by guessing unoriginal and predictable passwords. Stolen and reused credentials cause 86% of hacking incidents.
OTP generation is instant and has only a single-time-use validity. Hackers can’t steal, guess, or reuse an OTP. When used in combination with one or more other login factors, OTPs are extremely effective in securing user accounts.
How do one-time passwords work?
OTP systems rely on “shared secrets” between the user's device (typically a smartphone app or hardware token) and the authentication server. A shared secret is a unique key that is known only to the user's device and the authentication server. It's typically generated during the initial setup of the OTP system.
When someone attempts to access an app or account that uses OTP authentication, the network server's protocol generates a series of characters or numbers (the shared secret) using OTP hash algorithms. A device or an authenticator app will send these single-use codes.
