What is an OTP and how they protect your customer data

We log into various websites and apps daily, making account security crucial. Chances are, you've encountered the step of entering an "OTP" during your logins, this article breaks down what OTP is, how it works, and how modern tools can enhance security and the user experience.

What is OTP? Quick Understanding of One-Time Passwords

Let’s address the core question: What is OTP?

OTP stands for "One-Time Password." As the name implies, this password can only be used once and expires after it’s used. When you log into an account, perform an online transaction, or confirm a critical action, the system sends a password, typically consisting of 4 to 6 digits, via a pre-set channel (like SMS or a messaging app). You must enter this one-time password within a designated time to complete the verification process.

Unlike a traditional password that you set, the biggest advantage of OTP is its "one-time" use. Even if a hacker steals your OTP, it has already expired and can no longer be used for login or transactions, significantly enhancing account security.

Why is OTP So Important? How Does it Work?

OTP is the core of "two-factor authentication" or "2FA." Its operation is very straightforward:

Step 1: Enter basic credentials - You input your username and static password on a website or app.
Step 2: Trigger the second verification step - After validating your static password, the system generates a unique OTP.
Step 3: Receive and verify OTP - The system sends the OTP to your pre-defined device (your phone).
Step 4: Successful verification - You enter the correct OTP within the time limit (usually a few minutes), and you gain access to your account.

Since it's difficult for hackers to steal both your static password and your physical phone simultaneously, this step effectively blocks most account hijacking attempts.

Traditional SMS OTP vs. WhatsApp OTP: Which is Better?

In the past, most businesses rely on SMS (text messages) to send one-time passwords. However, with other messaging apps gaining popularity, using WhatsApp to send OTPs has become a more efficient choice.

Feature	Traditional SMS OTP	WhatsApp OTP
Delivery Rate & Speed	Easily affected by network issues, resulting in delays or being classified as spam.	High delivery rate, relying on internet transmission, with faster and more reliable delivery than SMS.
Cost-Effectiveness	Sending international SMS can be costly, especially for businesses with overseas customers.	More cost-effective, using internet-based messages, especially beneficial for cross-border commerce.
User Experience	Plain text passwords, single-dimensional experience. Messages may get lost in promotional SMS.	Smooth and professional experience, displaying verified business name and logo to increase trust. Customers don’t need to leave their preferred messaging app.
Security	SMS can be intercepted, offering lower security.	End-to-end encryption ensures a higher level of security than SMS.
Additional Value	Limited functionality, only for sending OTPs.	Multi-functional platform. In addition to OTP, it can handle post-sales support, marketing, and true omnichannel customer communication.

As the table shows, whether it’s security, cost, or customer experience, WhatsApp OTP is clearly superior to traditional SMS.

SleekFlow WhatsApp API: Your OTP Solution

We understand that for businesses, building a reliable and secure WhatsApp OTP system isn’t easy. SleekFlow, as a leading provider of omnichannel messaging solutions and WhatsApp API services, offers the perfect solution.

With SleekFlow's WhatsApp Business API, you can easily:

Automate OTP Sending: Integrate our API with your backend system to fully automate OTP sending to your customers.
Enhance Brand Image: Messages display your verified business account name, building customer trust and reducing the likelihood of being mistaken for spam.
Integrate the Customer Journey: From OTP verification to follow-up inquiries and services, customers can complete everything within a single WhatsApp chat, ensuring a seamless experience.
High Delivery Rate and Instant Speed: Enjoy a higher delivery rate and near-instant transmission speeds compared to SMS, ensuring customers don’t abandon the process due to delays in receiving their verification codes.

Whether it’s for member login, online transaction confirmation, service appointments, or updating customer information, SleekFlow provides the most reliable and modern one-time password delivery channel.

Conclusion

Understanding what OTP is and its importance is the first step in maintaining online security. Now that you know what OTP is, it’s also clear that selecting a secure and efficient delivery channel is just as critical.

To catch up to speed with the preferences of your customers, upgrade to a more advanced WhatsApp OTP solution.

SleekFlow helps businesses engage with their customers through all aspects of the customer journey, whether they are a new prospect looking for more information about your product and services or a returning patron to retarget to keep them coming back.

Contact the SleekFlow team today to learn how our AI omnichannel platform and WhatsApp API solution can help your business stay ahead in both security and customer communication!