SMS-based one-time passwords were a useful upgrade from passwords. They are no longer a defensible second factor. SIM-swap fraud, SS7 interception, phishing-prone OTP relay, and the broader telecom-trust assumption all push enterprises and regulators toward hardware-rooted alternatives — particularly in markets like India where SMS-OTP is still the default second factor across banking, government, and telco.
Multi-Factor Authentication
A simple password doesn't cut it for most systems. MFA grants access only after presenting at least two pieces of evidence:
- Knowledge Factor — Something you know (password, PIN, answer)
- Possession Factor — Something you have (token, card, mobile device)
- Inherence Factor — Something you are (biometric data)
MFA-enabled accounts require a second code generated through an alternative medium in addition to a traditional password.
SMS-based OTP Authentication and Its Disadvantages
Smartphones give us access to numerous services online — banking, shopping, social media, etc. This rise in connectivity gave rise to data theft. To overcome breaches, many providers introduced SMS-based OTP authentication. The concept is to enter an OTP received on your mobile to verify credentials. But SMS-based OTP authentication can also be compromised.
Disadvantages of SMS based OTP Authentication
- Low level of security for a Second Factor Authentication Method — SMS OTP is more like a two-step verification because you simply receive a message on your phone. Messages can be intercepted and copied by malware.
- Unsecure to Open Networks — Open or unsecured networks are the lurking ground for hackers (Man-In-The-Middle). Uploading malicious software becomes easy.
- Unencrypted Messages — SMS OTP is plain text passing through channels with weak security. SIM swap attacks let hackers obtain new SIMs and receive OTPs.
- Privacy and Security of Message not Guaranteed — Most network operators cannot provide proper security measures.
Why is SMS-based 2FA still so popular?
- Original assumptions about cellular network/handset security no longer hold; specialized Trojans hijack mobile phones.
- OTP requires reliable cell signal and battery life.
- Occasional SMS delivery failures.
- 3rd-party messaging providers often incur per-text charges.
Going beyond SMS authentication
FIDO2 is a standard that uses public-key cryptography and origin binding to resist phishing: the authenticator only signs for the origin the credential was registered to. That makes it phishing-resistant — one of several such factors, alongside certificate-based credentials like PIV. AmbiSecure cards and keys combine hardware-based authentication and public-key cryptography. AmbiSecure helps organizations accelerate to a password-less future via the FIDO2 protocol. The card and key require no battery or network connectivity.
About Ambimat Electronics
Embedded design experience since 1982. Solutions include AmbiPay, AmbiPower, AmbiCon, AmbiSecure, AmbiSense, AmbiAutomation across smartwatches, smart homes, medical, robotics, retail, pubs/brewery, and security.
References
- https://fossbytes.com/heard-blue-screen-of-death-there-are-black-red-green-white-purple-gray-yellow-brown-also/
- https://blog.securedtouch.com/digital-officers-guide-multifactor-authentication