SMS verification is also known as SMS authentication, mobile two-factor authentication (2FA), or SMS one-time password (OTP). It is a popular way for businesses to verify customer phone numbers and protect their accounts from fraud.
It is important to remember that SMS verification is not foolproof, and it should be used as a secondary security measure alongside other fraud prevention methods. Here are some of the main advantages of SMS verification:
Convenience
SMS verification works on almost all mobile devices and is easy to integrate into the checkout process. It is also a convenient way to prevent common fraud tactics that could otherwise compromise an order or account.
However, it isn’t as secure as some might think. SMS authentication is vulnerable to social engineering attacks and MiTM hacks. Moreover, attackers can easily clone and swap users’ SIM cards to access their codes.
While it is a simple and convenient way to verify customers, it’s not a good idea to use it as a form of MFA for high-risk transactions. Instead, it’s a good idea to combine it with other methods of authentication that are more robust against sophisticated attacks and can protect data across multiple platforms and apps. For example, you can set up authorization controls based on IP to determine whether or not a user needs to prompt 2FA authentication for Windows logon, RDP, RD Gateway, VPN and IIS applications.
Time-Saving
Many consumers recycle passwords across their various accounts, making it easy for hackers to take over their accounts by reusing old codes. SMS verification helps prevent this by sending unique codes directly to customers’ smartphones, which they then input into websites and apps to verify their identities.
However, it’s important to note that SMS verification is only one factor of authentication and may not be enough on its own to protect against phishing attacks. Hackers have also been able to trick carriers into rerouting the phone number of a victim to a different device, and there’s always the possibility that clocks could desync, leading to invalid codes.
To combat these threats, businesses should implement additional factors of authentication alongside SMS, such as time-based one-time passwords or 2FA, to prevent data breaches and other types of fraud. With these other methods of verification, users are able to sign in with peace of mind knowing that their identity is protected.
Reduced Risk of Fraud
As a second factor of authentication, SMS verification adds an extra layer of security to a website or app by requiring a user to enter a code sent to their mobile phone in addition to their password. As such, bad actors are unable to access a user’s account without possessing both the password and the mobile phone.
However, relying on SMS verification as your sole fraud prevention method is not an effective strategy. For one, SMS messages use the vulnerable SS7 protocol, and hackers can easily hack into this system to eavesdrop on conversations.
To prevent these types of attacks, you should employ a layered approach to fraud detection and buyer validation with other methods that are more sophisticated than SMS verification. For example, deploying in-app push authentications through your own branded app is a more secure solution than conventional SMS messages and can help you reduce costs by eliminating messaging fees associated with SMS.
Boosted Customer Satisfaction
SMS identity verification is a common method for authenticating buyers online because it offers an easy, fast experience that works on all major mobile platforms. As a possession-based factor, SMS authentication codes are delivered instantly to a user’s phone, and the code must be entered into an app or website to verify their identity. This security feature is more reliable than passwords or other username/password combinations that can be cracked by hackers and socially engineered by bad actors to gain ongoing access to an account.
Conclusion
Consumers are familiar with this form of two-factor authentication because they use it to sign in to their own accounts on popular apps and websites. While it’s not foolproof, the system is widely used and can be a good way to reduce friction at checkout for legitimate buyers. However, it’s important to keep in mind that there are ways for bad actors to bypass this security measure using SIM swapping, hacking, and synchronized devices (lookup). These issues can lead to fraudsters stealing codes or even the buyer’s phone number, which can be used to hijack an account.
Denise Moreno is a business consultant. She teaches people how to start a business. She tries to understand her client her own thought, tricks and show the possible way to start a business. She worked with hundreds of clients and made them successful. She earned his degree in the University of South Florida. Lynn is her husband’s name. They got married in 2009. They have two girls. Both of them have a passion for travel.