What an OTP is and where it is used
An OTP (One-Time Password) is a code valid only once and for a limited time. Sent by SMS to the user’s registered number, it proves that whoever attempts an action holds that phone. It is the most widespread second authentication factor because it works on any mobile phone, with no app to install and no data connection required.
- Sign-up and number verification when opening an account.
- 2FA login on digital channels.
- Account recovery and password reset.
- Confirmation of sensitive operations: transfers, new beneficiaries, personal data or device changes.
- Purchase validation and card transactions.
OTP, 2FA and MFA
2FA combines two factors from different categories: something the user knows (password), has (phone) or is (biometrics). MFA extends it to two or more. SMS OTP is a way to implement the “something you have” factor. We compare alternatives in SMS OTP vs authenticator app vs push.
What makes a good SMS OTP
Speed
A late code is a user who gives up. OTP traffic should be treated as priority transactional messaging, separate from promotional campaigns, and measured with real-time delivery reports to spot delays by carrier or time of day.
Deliverability
Each code generates a delivery report (DLR). With it your system knows whether the message arrived, can offer a resend or an alternative channel, and keeps evidence for customer service. See why an SMS may not be delivered.
Message design
A good OTP message is short, identifies the brand with an alphanumeric sender ID, states the validity, warns against sharing it and includes no links:
MyBrand: Your code is 482913. It expires in 5 minutes. Do not share it with anyone; MyBrand will never ask for it.Expiry, attempts and resends
| Parameter | Recommended practice |
|---|---|
| Length | 6 numeric digits |
| Validity | 3 to 10 minutes depending on the operation’s risk |
| Validation attempts | A low limit (e.g. 3 to 5) before a temporary lock |
| Resend | Allowed after 30 to 60 seconds, invalidating the previous code |
| Active codes | One per user and operation |
| Validation | Always server-side, never in the app or browser |
Your system generates and validates the code; the platform delivers it with traceability.
Security and fraud prevention
- SIM swap: the fraudster obtains a duplicate of the victim’s SIM to receive their codes. Mitigate it by combining OTP with risk signals and step-up authentication for high-risk operations.
- Smishing: fake messages impersonating the brand to steal codes. An identified sender and link-free messages help customers spot the legitimate SMS. See how to protect your customers from smishing.
- SMS pumping (artificially inflated traffic): bots requesting thousands of OTPs to third-party numbers to generate charges. Prevent it with limits per IP, device and number, challenges on public forms, blocking unserved destinations and verification-rate monitoring.
- Blacklists to stop sending to opted-out or abusive numbers.
Regulation and context in Mexico
Since September 2026, Mexico’s banking regulator (CNBV) allows SMS as a channel for the category-3 authentication factor in services run by technology-based correspondents, as explained in the new SMS authentication rule. The CURP line registration also makes it advisable to monitor delivery reports to detect suspended numbers.
Integration
Codes are sent through the SMS API (REST with token, allowlisted IPs and optional content encryption) or an SMPP connection. As a fallback, voice-call OTP reaches the user when SMS is not available. To evaluate code delivery with your own flow, we offer a 30-day pilot.
