SMS OTP is so popular and claims to offer more security than traditional passwords. However, it turns out that SMS OTP vulnerability is also unavoidable. Although, big companies such as PayPal, Amazon, Meta, and many more still use SMS OTP to authorize any action or attempt. On the other hand, SMS OTP replaces traditional username and password authentication. It also offers simplicity and security enhancement to both the user and the company. But, is it true that SMS OTP is vulnerable and not as secure as it seems? Let's find out.
Why Should You Abandon SMS OTP?
In today's digital age, SMS OTP (one-time passwords) have become the norm for securing online accounts. It is used in almost every action, from login attempts, banking and payment verification, account and password recovery, and many more. But we cannot set aside that this method has its flaws. SMS is considered old-fashioned technology that hackers can easily break. It is why the company needs to find a better channel to send OTP.
SMS OTPs security risk is growing bigger every day. With hackers becoming more sophisticated, it is difficult to say that SMS OTP is enough to protect users and companies. Below is the reason why you should abandon SMS OTP authentication:
1. SIM Swap Security Risk
The first issue about SMS OTP risks is SIM swap. It has become the most common case that hackers can access a user's account by SIM card swapping. Hackers simply pretend to be the SIM card holder and tell the provider that the SIM card is lost. Ultimately, the provider will issue a new SIM.
After receiving a new SIM, a hacker can easily do anything because most online attempts need SMS authentication and the passcode will always be sent to the SIM. The hacker will be able to break into users' accounts, hack sensitive data, and worst steal money from the user's online bank account.
2. SS7 Technical Flaw
SS7, also known as Signalling System No.7, is a crucial component of mobile communications. This standard allows for telephony services such as call forwarding, SMS, number translation, and more. However, there is a potential security risk associated with SMS One-Time Passwords (OTPs) when using SS7. Due to flaws in the protocol's design, hackers can exploit vulnerabilities in the SS7 protocol to intercept calls and SMS messages, including OTPs.
While these security issues are more commonly associated with older telecom networks, app owners who send SMS messages have no control over which telecom network their users are connected to, making it easier for hackers to exploit these vulnerabilities.
3. Social Engineering Risks
Not many people know that the user is the weakest link in the security chain when it comes to SMS security. Not only because hackers become more sophisticated, but also because of social engineering risks itself. It is proven by the rise of SMS-based scams in 2020 to 328 percent.
The common method to trick the user to spill their OTP codes is by using smishing. Users may receive false links on SMS and when they click it they eat the bait and are unaware that they have been revealed OTP to hackers.
4. Sending OTP Through SMS Can Be Quite Expensive
For the user's side, requesting a passcode through SMS may be easier and faster. But for the business side, it can be costly because the company pays for every SMS sent to the users. The company has to pay for every SMS as well as for the undelivered ones.
At the end of the month, OTP SMS becomes a substantial bill the company has to pay. Although, the price may vary depending on the provider. However, SMS attacks mostly come from weak SMS authentication, and it brings a bad impact on businesses.
5. Friction in User Experience
SMS OTP vulnerability also causes friction in user experience. Although it is easy and practical for the user's side where they don't have to create or memorize certain passcodes, it comes with deliverability issues.
The passcode often comes late and users cannot log in or pay their bills on time. They must wait until the SMS passcode is successfully delivered to their phone. In the worst case, the passcode was never delivered and it caused a poor user experience.
Alternatives to SMS OTP
SMS OTP vulnerability is unavoidable but fortunately, there are solutions for that. Other methods have proven to be more secure, more reliable, and cheaper as follows:
1. WhatsApp OTP
As the most popular messaging app with more than 2 billion users, WhatsApp OTP is a solution to SMS OTP security issues. WhatsApp offers end-to-end encryption that makes sending OTP for login attempts to WhatsApp more secure.
Moreover, sending OTP through WhatsApp is cheaper than sending it by SMS. It can save you more money that you can allocate to something more productive. You can also conduct more effective campaigns and gain better engagement with your customer.
2. Social Login
Another solution to avoid SMS OTP flaws or sms OTP no longer secure is by using social login which is very common now. It offers you and your customer convenience and security. It is also now becoming the most popular alternative to replace SMS authentication by users.
Users can choose to log on to the website using their existing credentials such as Gmail account, Facebook account, Twitter, Instagram, and so on. It is also faster because the user doesn't have to do a long and time-consuming sign-up process by using social login. Your customer will be happier and it is good for business.
3. WebAuthn/FIDO/Passkeys
The FIDO (Fast ID Online) Alliance has recently gained the support of tech giants Apple, Microsoft, and Google, who have jointly committed to implementing FIDO standards on mobile devices for authentication purposes. This move aims to replace passwords, which are inherently vulnerable to hacking, with a more secure and convenient method of authentication.
With this new approach, smartphones will act as secure passkey stores. Users can access the passkey by presenting something they are (biometrics), something they know (a PIN or pattern), and something they possess (smartphone) in a single action. Conclusively, OTP is prominent and important to add more security layers. But, considering SMS OTP vulnerability, the company should look for a better channel for sending OTP. Companies can use better and cheaper alternatives such as WhatsApp, email OTP, or social login.
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