Why OTP (One Time Passwords) Is Essential?

Category: News, Webdesigning, Webdevelopment

One Time Passwords, popularly known as OTPs are considered as the authentication factor of choice for the majority of the Indian based payment service providers. This basically works as the second layer of defense against the financial frauds. At present, almost all the banks and mobile wallet companies in India are using the OTP method to authenticate the customers as well as their transactions. In this case, before an online transaction, the payment gateway sends an OTP to the registered phone number of the customers. The transaction only completes after the customer enters an OTP generated by the system. Besides, these days, use of OTP has even extended to different non-financial transactions like logging the customers to different Smartphone applications.

But before using it is important to know what OTP is all about and how does this work?

When one uses financial services for online transactions on the basis of the configuration, the server uses specific algorithms and generates an OTP and therefore sends the OTP to the customer through the registered email or phone number. Here the transaction is authenticated with the help of OTP, therefore the customer will be able to make payment or transfer cash online.

In the case of banking services, while someone initiates any selected transactions on Internet banking, the person needs to enter an OTP or One Time Password to confirm the authorization of a transaction. This OTP is delivered to the person through email or SMS or both depending on his/her choice.

OTP or One Time Passwords is meant for single time use. So, if you enter a wrong OTP due to any reason during the financial transaction, then the transaction will be incomplete. Depending on the bank or financial institution, your transaction can also get declined. In this case, you have to generate a new transaction and fresh OTP. Website designing company in India can only design a secure payment gateway.

Tags: financial transaction | internet banking | one time passwords