Full Form of OTP

What is the Full Form of OTP?

In this article, we will learn about the Full Form of OTP: OTP stands for ‘One-Time Password’ which is a numeric password generated specific to the transaction and valid for a limited period of time.

How Does an OTP Work?

A traditional static password system requires the user to set a password for login into an account or to authenticate a transaction. The user is required to remember and input the same password every time the process is run.

One-time passwords (OTPs) are system-generated passwords that are dynamic and are valid only for a particular transaction or for a particular period of time, after which the same OTP cannot be reused to complete the transaction, and cannot be used in another session. The randomly generated OTP is unique to the transaction and session and will bear no resemblance to OTPs generated in subsequent sessions.

How to Get an OTP?

In the articles Full Form of OTP. The two most common ways in which an OTP is generated is explained in brief below.

1. Time-Based One-Time Password (TOTP)

• This system uses an algorithm that considers for its input the current date and time as a basis of authentication.
• The OTP generated is valid for a limited duration from the time of its generation. On the expiry of the time limit, the OTP can no longer be used to authenticate the transaction and must be regenerated.
• The freshly generated OTP is unique and unrelated to the previous OTP, also valid for a specified period from the time of its generation.
• The time period for which a TOTP is valid is usually in increments of 30 seconds, that is, 30 seconds, 60 seconds, 90 seconds and so on.

2. Based on Mathematical Algorithms

• An initial value known as the ‘seed’ is chosen and a mathematical function/algorithm is run on the seed value generates a series of passwords and is stored on the system.
• The values are then dispensed in reverse order as OTPs in different login sessions.
• The algorithm or function is almost impracticable to be deciphered from the end value i.e. the OTP received.

OTPs, particularly TOTPs, are increasingly used as part of a two-factor authentication system, which works as follows:

• The user is first required to enter his user ID/e-mail ID/mobile number and password.
• The credentials so entered are first approved by the system, post which an OTP is sent to the registered e-mail ID or mobile number.
• The user then inputs the OTP received in the system.
• Upon verification of the OTP entered, the system completes approves and completes the transaction.

Thus, the transaction is authenticated first by the static password set by the user, and secondly by the OTP generated by the system, serving as an additional layer of security.

Methods of Delivering OTP

OTP can be delivered in multiple ways, some of the common ones being:

• Shown on mobile apps processing the transaction.
• Sent as a text message to the registered mobile number.
• Mailed to the registered e-mail ID.
• Automated voice calls from a centralized server conveying the OTP.

Examples of OTP

In the article, Full Form of OTP. OTPs are generally 6-digit numeric codes that are unique to a user session and transaction. Following are some examples of how an OTP might look like:

• 568479
• 983013
• 631178

OTP vs Static Password

In the article Full Form of OTP. Below we explain the difference between OTP vs Static Password:

Static Password	OTP
Static passwords are set by the user, in line with the requirements specified by the system. For instance, the system may require a password to contain at least one numeric character and one symbol.	OTPs are system-generated numeric codes.
Static password once set, is used by the user to authenticate at the time of every login or transaction, i.e. the same password is used for authentication for every user session or transaction.	An OTP once generated, is valid for a specific time period or for the specific user session or transaction. A fresh OTP is generated at the time of every new login or transaction execution.
Static passwords provide a lower level of security as compared to OTPs since they are more susceptible to theft of passwords and hacks.	OTPs are a more secure form of authentication since a unique password is generated for every user session or transaction, and the algorithm is hard to decipher or hack.

Benefits of OTP

A more secure form of authentication:

• Static passwords are more prone to replay attacks wherein a data transmission such as a password input is intercepted and is subsequently used to execute fraudulent transactions without the knowledge of the user.
• Since OTPs are for single-use, only for a particular user session and transaction, even if intercepted, they cannot be applied to validate subsequent transactions where a fresh OTP would be generated.
• Every subsequent OTP bears no visible resemblance to the previous one and therefore cannot be easily guessed.
• OTPs are generated based on complex algorithms that are difficult to derive from the OTP itself.
• When used in a two-factor authentication system, OTPs provide an additional layer of security in combination with static passwords.

Conclusion

OTPs, when used in a two-factor authentication system, provide additional security as opposed to static passwords. Although more secure than a static password, OTPs can also be susceptible to cyber-attacks. Therefore, in user interest, it is advised not to disclose OTPs as well as static passwords to any third parties.

Recommended Articles

This is a guide to the Full Form of OTP. Here we discuss how OPT works? 2 ways to get OPT with examples, along with benefits of it. Also, know the difference between. You can also go through our other related articles to learn more –

1. Statement of Retained Earnings Example
2. Career in Finance
3. Full Form of FYI
4. Full Form of HR