What is One time password:
A OTP ( One time password ), also known as one-time PIN or dynamic password, is a password that is valid for only one login session or transaction, on a computer system or other digital device.
WHAT IS MEANT BY OTP NUMBER
OTP is a “One-Time Password” which is randomly generated and sent to your registered mobile number and registered email address for validation of your transaction. This is to provide an enhanced level of security on card transactions.
WHAT IS OTP VERICATION
Android has an API that does exactly this. The Web OTP API lets your app receive specially-formatted messages bound to your app’s domain. From this, you can programmatically obtain an OTP from an SMS message and verify a phone number for the user more easily.
BENEFITS OF A ONE-TIME PASSWORD
The one-time password avoids common pitfalls that IT administrators and security managers face with password security. They do not have to worry about composition rules such as,
• known-bad and weak passwords,
• Sharing of credentials or reuse of the same password on multiple accounts and systems.
• Another advantage of one-time passwords is that they become invalid in minutes, which prevents attackers from obtaining the secret codes and reusing them.
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HOW TO GET A ONE-TIME PASSWORD
When an unauthenticated user attempts to access a system or perform a transaction on a device, an authentication manager on the network server generates a number or shared secret, using one-time password algorithms. The same number and algorithm are used by the security token on the smart card or device to match and validate the one-time password and user.
A one-time PIN code is a code that is valid for only one login session or transaction using a mobile phone. It is often used in two factor authentication or 2FA to provide an extra layer of security for the user when he uses an ATM machine or tries to login to a service from a different computer.
WHY IS A ONE-TIME PASSWORD SAFE?
• This feature prevents some forms of identity theft by making sure that a captured user name/password pair cannot be used a second time.
• Typically the user’s logon name stays the same, and the one-time password changes with each login.
• One-time passwords are a form of strong authentication, providing much better protection to E-banking, corporate networks, and other systems containing sensitive data.
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OTP PASSWORDS CAN BE GENERATED IN SEVERAL WAYS SUCH AS;
• GRID CARDS
Simple methods such as transaction numbers lists and grid cards can provide a set of one-time passwords.
These methods offer low investment costs but are slow, difficult to maintain, easy to replicate and share, and require the users to keep track of where they are in the list of passwords.
• SECURITY TOKENS
A more convenient way for users is to use an OTP token, a hardware device capable of generating one-time passwords.
Some of these devices are PIN-protected, offering an additional level of security.
The user enters the one-time password with other identity credentials (typically user name and password), and an authentication server validates the logon request.
Although this is a proven solution for enterprise applications, the deployment cost can make the solution expensive for consumer applications.
Because the token must be using the same method as the server, a separate token is required for each server logon, so users need a different token for each Web site or network they use.
SMART CARDS AND OTP
More advanced hardware tokens use microprocessor-based smart cards to calculate one-time passwords.
Smart cards may have several advantages for strong authentication, including data storage capacity, processing power, portability, and ease of use.
They are inherently more secure than other OTP tokens because they generate a unique, non-reusable password for each authentication event, store personal data, and they do not transmit confidential or private data over the network.
Display payment card can even integrate an OTP generator for 2-factor authentication.