What is SMS Verification? Key Benefits and Common Use Cases

From personal conversations and retirement funds to confidential business data, the password is the behind-the-scenes actor of our lives. So much of our personal and professional life lies behind it. Over the years, passwords have been the go-to method for securing our digital assets. However, now things have changed. With each passing day, cyber threats are becoming more sophisticated. Therefore, passwords alone are not enough to secure data. According to a study, in 2021, more than 80% of data breaches were associated with weak, reused, or stolen passwords. SMS verification code can help mitigate the risk of compromised passwords.

So, what is SMS verification? How does SMS code verification work? What are their pros and cons? Read on to find its answer.

What is SMS Verification?

SMS verification is the security method that uses a text message to confirm a user’s identity. It adds an additional layer of security to online transactions, account logins, and other digital interactions with apps and websites. Businesses must employ SMS verification to secure their users and themselves from scammers and cyber threats. This method uses 2FA – two-factor authentication, OTP – one-time password, and MFA – multi-factor authentication system to improve security. This method delivers a unique verification code to users’ mobile phone numbers through SMS.

How SMS Verification Works

In SMS verification, users’ need to confirm their identity through the unique and temporary code sent to their mobile phone via text message. This SMS verification code reduces the possibility of unauthorized access and enhances protection against cyber threats.

Let’s check out the step-by-step process involved in SMS verification.

Here are some steps that are involved in the SMS verification process.

1. A user will get a prompt to enter their phone number when registering or signing up for an account on the specific website/app.
2. During the sign-up process, users will receive a one-time password/SMS verification code.
3. After the sign-up process is complete, the user enters their username and password to log in to the business app or website.
4. To complete the login process, a user must enter that code into the app or website.

Why is SMS Verification Important?

If you are wondering why SMS verification is important, the simple answer is that it ensures secure access, helps prevent fraud, and improves user trust.

How?

Let’s understand it in brief.

SMS verification keeps your users safe and prevents their sensitive information from falling into the wrong hands. Passwords alone can’t do it because some users use the same passwords everywhere or use easy-to-guess passwords. Therefore, database hacking or social engineering can easily hack these passwords. Here is where SMS code verification comes into the picture. The unique code is sent to the users’ phone number, making their account more secure.

According to the Google Study, SMS verification code blocks automated bot attacks by 100%, bulk fishing attacks by 96% and targeted attacks by 76%. Protecting your users = Protecting your business.

SMS verification strengthens consumer trust, especially during online transactions. When users’ data is protected, it can easily attract and retain new users and give you a competitive advantage. Studies show that over 25% of users abandoned transactions because of trust issues in the website or app’s security. Therefore, if you don’t want this to happen with your business, implement SMS verification and win your customers’ trust.

Various legal directives like GDPR, HIPAA, and PCI DSS are concerned about cybersecurity and users’ sensitive information, and they encourage businesses to comply with users’ sensitive data.

Implementing SMS verification is an excellent way to future-proof your business against cyber attacks.

What are the Key Benefits of SMS Verification?

Here are a few benefits that make SMS verification so effective as compared to other verification methods such as WhatsApp, Email, or any other authenticator app. That’s why businesses around the world widely use it.

Common Use Cases for SMS Verification

1. Account Registration and Login

SMS verification code helps confirm the identity of the users, especially during the sign-up or login to the specific platform. It confirms that the phone number provided belongs to them, which reduces spam and fake accounts.

 For example,

Your verification code is 583215. Please enter this code to complete your registration. Didn’t request it? Ignore this message.

2. Two-factor authentication (2FA)

In two-factor authentication, SMS code verification acts as the extra layer of security. Therefore, even if someone’s password is compromised, the verification code sent to their phone keeps their account secure.

 For example,

Your verification code is 726123. Enter this code within 10 minutes to complete your login. If you didn’t request this code, kindly ignore it.

3. Password Reset

Don’t you remember your password? Worry not! SMS verification can help you reset your password by sending the code. It also ensures that only the account owner can reset the password.

 For example,

Forgot your password? Don’t worry! Use this code to reset it: 345192. This code will expire in 5 minutes.

4. Payment and Transaction Authentication

There is a high chance of fraud during online transactions. Many apps and websites require an SMS verification code to confirm the payments by adding an extra layer of trust for users and businesses to minimize it.

For example,

Your OTP for completing the payment of $150 on ABC store is 674512. Valid for 10 minutes. Don’t share it with anyone. If you didn’t request it, contact us immediately.

5. Website/App/Service Access

Whether you want to buy something from the e-commerce platform or want to play a game, SMS verification makes sure that only genuine users can access premium features or sensitive areas.

 For example,

XYZ Technologies: Your verification code is 341678. Enter this code to access your account. Valid for 10 minutes only!

SMS Verification Code Usage Across Industries

SMS verification is a widely adopted security measure. It improves authentication procedures, protects sensitive information, and even mitigates fraud risk across various industries.

SMS Verification Code Best Practices

Implementing an SMS verification code requires accuracy and adherence to best practices. So that users can have a secure and hassle-free experience. Here are some key practices to consider when implementing an SMS verification code.

1. Timing

In the SMS verification code, speed matters. Usually, users expect to receive their OTP instantly. Delays can lead to frustration and impact the overall user experience.

2. Code Expiry Timing

You should set the expiration period for the code such as 5 to 10 minutes. It minimizes the risk and, at the same time, encourages users to act quickly.

3. User Verification

You must implement mechanisms to verify the accuracy of SMS verification codes entered by users. It may include limited attempts, timeouts, and extra verification steps to prevent misuse.

4. Message Content

The content of the verification code message should be clear, easy to understand, and concise. Don’t use complex language; clearly disclose the purpose and provide instructions on how to use it.

5. Security

You must prioritize the security of the SMS verification code by ensuring that it remains encrypted and protected from cyber threats. You must implement measures to prevent unauthorized access to SMS codes.

6. Message Delivery

Optimize message delivery by using secure and reliable SMS gateways. You should monitor delivery rates to ensure it delivers instantly and consistently to all recipients.

Challenges and Limitations of SMS Verification

Undoubtedly, SMS verification is effective, but it has challenges. Here is a brief breakdown.

Conclusion

In summary, scammers are becoming increasingly tech-savvy these days, so a single layer of password security is not enough. You need tools like SMS verification to safeguard your business against hackers and win the trust of your customers. With SMS code verification, you can verify your users’ identities before granting them access.

Do you want to start with SMS verification? Contact us today. At Textdrip, we offer integration capabilities to integrate SMS verification tools. You can sign up for a free trial or connect with us for your custom needs.