Traditional passwords no matter how secure, strong, or carefully generated may be susceptible to attacks. For many who use similar passwords on numerous sites for easy remembrance, the existence of OTPs (One-Time Passwords) has been quite the saving grace.
Essentially, if you use similar passwords for multiple applications or websites, there is a high risk that your password can be easily intercepted by a calculated attack and unauthorized transactions can be carried out on your behalf. Sounds like something from a horror movie, right? That’s why OTPs or dynamic passwords exist.
What is an OTP? It is a password for a one-time use sent to your registered mobile number. OTPs are usually made up of numbers and can range from four to six digits, they are often valid for a limited period and cannot be reused for subsequent transactions.
Much ado about passwords?
Even where they are not directly associated with managing our funds, passwords not only help protect the personal information we do not want to be shared but they also help add needed extra layers of security. In the absence of innovation like the OTP, to protect your account from possible attacks, you would need to change passwords regularly and that can be quite an inconvenient task to undertake.
Sometimes, even the most careful persons can get targeted in cyberattacks and end up losing data to the wrong hands. This is why for financial services, the OTP is a logical safeguard for customer protection.
How does an OTP work and is it safe for transactions?
Simply put, your OTP is an extra layer of verification, an identifier of some sort, required by your financial institution for you to complete or authorize a transaction. In instances where unauthorized access is gained to your account, an OTP sent to your device can serve as a warning sign that someone is trying to complete a transaction you did not initiate.
OTPs sent via SMS are safe and convenient- where financial services in Nigeria are concerned, they have proven to be the difference in instances where customers could have lost funds to unauthorized purchases and online hacks.
Now that we have established that OTPs are a non-negotiable security feature any financial institution should offer their customers, let’s launch into the pros and possible cons of OTPs.
Ultimately, dynamic passwords are not only free from the cumbersome password-composition rules, but they also offer a safe and convenient way to complete transactions in the least complicated way possible.