What is SMS OTP? How It Works, Benefits, Implementation & Best Practices

With more people and businesses operating online than ever before, keeping accounts and data secure is crucial. That’s where SMS OTP comes in.

OTPs are the backbone of modern authentication but delivering them reliably, securely, and at scale is harder than it looks.

But what exactly is SMS OTP, and how does it work? This guide will walk you through the fundamentals of SMS OTPs including:

• What SMS OTP is and how it works

• Common use cases and real-life applications of SMS OTP

• The benefits and potential security risks as well as the challenges of using SMS OTP

• Alternative authentication methods 

• Best practices for successful implementation of SMS OTP

• What to consider when choosing an OTP provider

• How to implement SMS OTP into your application 

What is SMS OTP?

An SMS OTP (One-Time Password) is a temporary and secure code sent via SMS (Short Message Service) to a user’s mobile phone. It’s used as a way to verify a user’s identity during authentication. 

SMS OTPs are the most widely used form of one-time password, but they’re just one part of a broader authentication ecosystem.

Typically, an OTP is a randomly generated 4 to 8 digit code that only be used once and expires after a very short period, often within just a few minutes.

SMS OTPs have become a widely adopted authentication method due to the growing vulnerability of passwords, which users frequently keep short, simple, and reuse across multiple accounts.

As a result, companies can better protect their consumers by incorporating SMS OTPs into their two-factor authentication (2FA) setups.

How Does SMS OTP Work?

The main purpose of an SMS OTP is to add an extra layer of protection for consumers to prevent hackers from accessing accounts and stealing sensitive information. SMS OTPs reduce the risk of such attacks since fraudsters would need a user’s password and access to their mobile device.

An SMS OTP system works by generating a one-time code, delivering it through a messaging provider, and verifying it in real time when the user enters it.

While on the surface, this process seems simple enough, it relies on a multi-step infrastructure involving backend systems, APIs, telecom networks, and real-time validation.

Step-by-Step Breakdown 

Here’s what really happens behind the scenes when an SMS OTP is sent and verified:

1. User initiates a request

The process begins when a user performs an action that requires verification, such as signing up, logging in or confirming a transaction, prompting the user to provide their phone number.

The application collects the user’s phone number and sends a request to the backend. 

2. OTP is generated

The backend server generates an OTP, typically consisting of a random 4 to 8 digit number. For security purposes, this code is time-limited, can only be used once and is often stored temporarily in a hashed format. 

3. SMS is sent via an SMS API

The backend sends the OTP to the user through an SMS gateway provider using an API. At this stage, the API handles the message formatting then the request is routed to an SMS provider that in turn prepares the message for delivery to the user. 

4. The OTP is routed through carrier networks

After the message leaves the SMS provider, it is transmitted through mobile carrier networks to reach the user’s device. 

At this step, performance is critical as a number of factors could affect SMS deliverability issues. Delivery speed will often depend on routing quality and we need to take into account that different countries and carriers affect latency. Not to mention that any network issues can impact delivery.

5. User receives the code

At this stage, the user receives the code on their device and enters into the login page for authentication. A good user experience at this stage to ensure that the code is easy to read and copy as well as providing autofills and retries whenever needed. 

6. Backend verifies the OTP

Finally, the backend validates the code entered by the user by checking:

• Whether it matches the generated OTP

• Whether the code is still valid or has expired

• Whether the OTP has already been used successfully

If the verification succeeds, the user is authenticated and is granted access. Otherwise, they are prompted to retry or request a new code.  

Example of SMS OTP: What it Looks Like in Practice

Let's consider a dating app that prioritizes user privacy, especially for those who’d rather keep their cheesiest pick-up lines out of the public eye.

When a user triggers an action that requires an OTP, such as logging into the app from a new device, here’s what happens:

• The app doesn't recognize the device. It suggests sending a verification code by SMS to confirm the user's identity.

• The app automatically asks its SMS OTP provider to create and send an OTP to the user’s mobile number.

• The SMS OTP provider’s algorithm generates a random 4-digit code and sends it to the user’s phone, as in the image below. SMS OTPs usually follow the same pattern:

  {{Code}} is your validation code for {{Name of the app}}.

• The user enters this code into the dating app. The SMS OTP generator’s algorithm validates the code instantly if it’s correct. If it is, the user gains access to the app.

And the best part is that it all happened automatically, in less than a minute. Everyone comes out a winner: the user because their data is clearly secured and the dating app because it's safe from hackers.

The process should ideally take just a few seconds, that is if the system in use is fully optimized. Although the flow seems pretty straightforward, OTP delivery depends on several complex systems working together:

• Routing logic

• Carrier relationships 

• Fallback mechanisms 

• Fraud detection systems

Therefore, the quality of the infrastructure affects whether the OTPs arrive instantly or fail altogether.

TOTP or HOTP: What’s the Difference?

SMS OTPs usually fall in two different categories, depending on the algorithm used to generate them: HOTP (HMAC-Based One-Time Password) and TOTP (Time-Based One-Time Password).

The key difference between these two is the moving factor that changes each time a code is generated by the algorithm.

• The HOTP is counter-based. The counter increases each time an OTP is requested. This means the code remains valid until it is used or the counter increases.

• The TOTP is time-based, valid only for a specific interval. Once the interval passes, a new OTP can be generated.

In that sense, TOTP is a type of algorithm that generates unique one-time passwords based on a shared secret (seed) and the current time. This means that when a user attempts to log in, the app or website will generate a code based on the seed and a moving factor.  If the user doesn’t type in the code within the predetermined time, the code resets and the user will need to request a new code. 

Unlike TOTP which relies on a clock as a moving factor, HOTP relies on a counter value that increments with each use. As a result, a one-time password via HOTP will last longer than TOTPs, which may be more convenient to users since it gives them more time to log in before the code expires, making it more user friendly.

Choosing between the two will depend on a number of factors. TOTP is widely used in systems that require time-based, short-lived authentication codes, such as banking platforms or login systems with two-factor authentication. Because TOTP codes expire quickly, they reduce the window in which an intercepted code can be reused. This makes them highly practical for real-time authentication scenarios where both client and server clocks are synchronized. 

For example, TOTP is commonly used for user logins with 2FA through applications like Google Authenticator or Microsoft Authenticator, as well as for online banking verification where time-limited codes help mitigate fraud risks.

HOTP, on the other hand, is better suited for environments where time synchronization is unreliable or unavailable, such as offline systems or hardware tokens without clocks. Since HOTP is based on a counter rather than time, it allows authentication without requiring continuous communication with a time source.

Keep reading: TOTP vs HOTP: What's the difference (and which is better)?

The (Many) Use Cases of SMS OTP

Business can use SMS OTPs in many ways to enhance the security and trust of their users. The most common use cases include:

• User registration: Verify your new users identity and phone number during the account creation process.

• Two-factor authentication: Add an extra layer of security to the username and password login process.

• Password resets: Secure the process of resetting a forgotten or compromised password to prevent your users from being locked out of their accounts.

• New device authentication: When users log in from new or unrecognized devices, requesting an SMS OTP can help ensure that they're the rightful owner of the account.

• Passwordless authentication: If you want to allow your users to sign up using their mobile number only, sending an OTP helps you secure their authentication.

• Transaction verification: For any transaction, such as a transfer or an online payment, an SMS OTP is used to verify the validity of the transaction.

• Changing account details: When a user wishes to change sensitive account information, such as their email address or password, double check its authenticity with an OTP.

• Activating bank payment cards: Newly issued bank cards often require activation via OTP to ensure they are in the possession of the rightful owner. This adds an extra layer of security and ensures that only the cardholder can activate and use the card.

Real-World Applications

We’ve seen the many general scenarios in which SMS OTPs can be used, which is why businesses nowadays across various industries are incorporating them into their authentication processes to verify user identity. Here are a few ways some industries are leveraging SMS OTPs to keep their data secure.

• Secure Transactions in Banking and Fintech

Banks handle extremely sensitive financial data and are frequent targets of cyberattacks and fraud. As a result, SMS OTP verification has become a standard security measure across the industry.

For customers, this process has already become familiar- receiving a code via SMS whenever they log in to online banking or make a transaction or money transfer to confirm that it’s truly them initiating these actions. 

By requiring an OTP during logins, payments or transfers, financial institutions add an extra layer of security through identity verification. This ensures that in the event that login credentials are compromised, unauthorized users will not be able to access these accounts.

• Prevent Fraud in Ecommerce and Retail

Fraud is one of the most significant challenges in the fast-paced world of ecommerce, with attackers looking to steal the information of unsuspecting online shoppers. 

SMS OTP helps retailers secure customer accounts by verifying user identity during account logins, checkout, or payment authorization. This not only reduces fraudulent transactions but also builds customer trust by demonstrating that their personal and financial information is protected.

As a result, businesses can improve both security and customer confidence without adding significant friction to the user experience.

• Protect Patient Records in Healthcare

In the healthcare industry, data is often highly sensitive making them prime targets for cyberattacks. SMS OTP provides a safeguard for healthcare providers to secure access to patient portals and protect their information as well as verifying that only authorized individuals can view or modify medical records.

This adds a critical layer of protection, thereby preventing data breaches while maintaining patient privacy and trust.

• Ensure Data Protection in Government Services

Government services store and process large volumes of confidential data, making OTP verification a necessity to secure online portals, including tax filing and voting systems, tax filing, license renewals and other sensitive services. 

This is where SMS OTPs come in handy to prevent unauthorized access to highly classified information and ensure that only the true owners of these accounts can access their dedicated portals.

This is essential for maintaining public trust and meeting strict data protection requirements. 

• Protect User Accounts on Social Media

Social media platforms are prime targets for account takeovers, impersonation and abuse due to the vast amounts of personal data they hold including private messages, photos and sensitive user interactions, making security on these platforms a top priority.

SMS OTPs add a critical layer of security for these accounts by verifying user identity during login attempts, especially from new devices or suspicious locations, as well as during password resets or other high-risk actions.

This means that even if a password is compromised, unauthorized users cannot easily gain access. Additionally, SMS OTP verification during sign-up reduces the creation of fake accounts and bots, contributing to a safer and more trustworthy platform.

By incorporating SMS OTPs into authentication flows, platforms can significantly reduce account takeovers, prevent abuse such as fake account creation, and better protect user privacy while strengthening the overall integrity of the platform. 

• Protect Online Learning and Examination Platforms

With the rise of digital education, verifying user identity has become critical. 

SMS OTP verification is key to confirm student identities during login and before online exams, enabling educational institutions to deliver secure and credible education experiences online. It also ensures that students are the only ones that can access their grades and any other personal data.

Is SMS OTP Secure? Risks, Limitations & When Not to Use It

Since SMS OTPs are a one-time randomly generated code, they’re very effective at mitigating risks. This means that a fraudster would need to guess each number correctly in under five minutes. That's 10 possibilities, four times. Mathematically, that translates to a one in a 10,000 chance of getting an OTP right.

Adding to that randomness is the fact that an OTP is valid only once and is time-sensitive. It’s like trying to find a needle in a haystack, except the needle moves to a different haystack every minute!

Not to mention, they’re very easy to implement and set up, making them a popular choice for organizations looking for that extra level of authentication without the extra hassle.

Adding this extra layer of safety is critical for businesses handling particularly sensitive information where relying on users to create strong passwords would simply not be enough.

However, while SMS OTPs improve security, they’re not foolproof. There are many risks associated with SMS-based OTPs including:

• Delivery issues - Delays or failures can impact user experience and reliability

• High costs - Especially at scale or across international markets

• SIM swapping - Possibility of attackers hijacking a user’s phone number

• SS7 protocol vulnerabilities - Weakness in telecom infrastructure can be exploited

• Phishing attacks - Users can be tricked into sharing OTPs

It’s a risk companies can mitigate by educating their users, but more importantly, by implementing a secure OTP provider that actively prevents fraud.

Nonetheless, these risks cannot be eliminated entirely through user education alone. They require a combination of strong infrastructure, monitoring, and fraud prevention mechanisms.

When Not to Use SMS OTP

While SMS OTP is convenient and effective for many scenarios, it may not provide sufficient protection for high-risk use cases.

Smartphones are the most convenient method to access various services. However, they’re also a common target of malicious malware and data theft. Therefore, companies must decide if it’s safe enough to protect their own and their customers’ data. 

As the value of an account or transaction increases, so does the incentive for attackers to bypass SMS-based protections.

In high-risk contexts, organizations should implement stronger authentication mechanisms and should not rely on OTPs as the sole authentication method unless they have a high-quality OTP system that can mitigate these risks (more on that later).

SMS OTP vs Other Authentication Methods

Not all authentication methods offer the same level of security. While SMS OTP is widely used, newer approaches may provide stronger protection, especially against phishing and SIM-based attacks.

Here’s how they compare:

It’s worth noting that, unlike alternatives such as authenticator apps, SMS OTPs provide a practical balance of security and ease of use. They don’t require any apps or additional hardware, which makes deployment fast and hassle-free. Additionally, email accounts are more vulnerable to phishing and malware attacks compared to phone numbers.

Ultimately, it’s about striking the right balance between strong security and a seamless user experience.

Why SMS OTP Fails: Key Challenges to Consider

SMS OTPs offer convenience and a baseline level of security, but they do come with important limitations, often caused by implementation flaws that organizations need to consider.

Security Vulnerabilities

As discussed earlier, SMS OTPs are not immune to attacks. SMS OTPs are often susceptible to threats such as SIM swapping, SS7 attacks and phishing.

Because SMS OTP relies on possession of a phone number rather than strong identity verification, it can be bypassed by determined attackers.

Cost

While SMS OTP is easy to implement, costs can quickly add up, particularly for large-scale companies with millions of users.

Here are some possible costs to take under consideration when implementing an authentication system:

• Businesses are typically charged per message sent, meaning every login or verification attempt incurs a cost. 

• International messages can drastically increase expenses depending on the destination country and routing. 

• Additional costs may additionally arise from failed retries or fraud-related deliveries. 

Thus, costs associated with SMS OTP providers may continue to build especially as a company scales.

SMS OTP Deliverability: Latency, Routing & Success Rates

SMS Deliverability refers to the percentage of outgoing SMS messages which are successfully delivered to and received by their intended recipient. As a result, the effectiveness of SMS OTP depends largely on whether messages are delivered reliably and on time. 

One major issue that could affect sending OTPs through SMS is network reliability. Things such as carrier outages and any other network issues could delay the arrival of an SMS message. 

For example, mobile network operators implement different policies and spam filtering systems that can affect SMS delivery and, in some cases, may block these messages from reaching users altogether.

Not to mention the issue of sending SMS internationally, which rely on carrier partnerships and infrastructure. Some carriers will also have better international connectivity than others directly impacting delivery rate. 

The best solution to tackle deliverability issues is to choose smart authentication systems that offer a multi-routing and multi-channel routing engine to guarantee the highest possible delivery rate by finding the best route for each individual user. 

On a larger scale, countries can also block SMS messages that set their own rules, which could significantly affect the reliability of SMS deliverability. For example, some countries may enforce content restrictions on their networks resulting in automatic blocking of SMS OTP messages by local mobile operators if they don’t comply with local requirements. 

With all that in mind, delivery latency isn’t guaranteed as any network issues may cause delays up to several minutes, rendering most OTPs useless within short validity windows. This could eventually result in poor user experience and increased drop-off rates.

User Experience Friction

Even though SMS OTPs are relatively simple to set up, they can still introduce friction and affect the user experience. 

SMS delivery failures, for example, can lead to customer frustration that could negatively impact brand perception. 

Some other issues commonly associated with SMS OTPs that can put a damper on the user experience include:

• Delayed or failed SMS OTP delivery may require multiple and repeated requests leading to users becoming frustrated and giving up altogether

• Users may be forced to switch devices to retrieve and copy the code 

• Customer support can become burdened when users run into SMS delivery issues

Over time, this can negatively impact conversion rates and user satisfaction. In other words, SMS OTPs are only effective when the code arrives quickly and when the process in which the user inputs this code and is verified is reliable and as optimized as possible.

This will help mitigate the risk of users dropping off during the sign-up process leading to low conversion rates. 

To address these challenges, businesses should consider more advanced authentication infrastructure. Modern OTP solutions improve reliability and security by offering:

• Multi-routing and intelligent routing to select the best delivery path

• Multi-channel fallback (e.g., SMS, WhatsApp, email) to increase success rates

• Real-time monitoring and fraud detection to block suspicious activity before messages are sent

The goal is to maximize delivery success while minimizing cost, latency, and fraud.

The Benefits of SMS OTP

No system is without its flaws and despite the challenges that may come up with the use of SMS OTPs, they bring their fair share of benefits to any company looking for that extra layer of protection.

Enhanced Security and Fraud Reduction

As discussed earlier, SMS OTPs provide a vital layer of security by utilizing a time-sensitive code that's almost impossible to guess. This helps companies fight fraud and protect user accounts and information from unauthorized access while reducing the risks associated with solely relying on user passwords.

Build Customer Trust

Over 25% of online users have abandoned transactions due to concerns about an app or website's security. Implementing SMS OTP in your two-factor authentication system can help eliminate these barriers to conversion by reassuring customers that their data and financial information are safe with your company.

Accessible to all Your Users

SMS is the most used type of 2FA worldwide. It's easily accessible to all users with a phone, as it doesn’t require any additional apps or technology, and leverages a medium that users are already familiar with.

SMS is universally supported by mobile network operators, making it the ideal channel for reaching users on a global scale.

Instant User Authentication

With high delivery and open rates, SMS allow your users to receive and use their OTPs instantly, facilitating a smooth user authentication experience.

Ease of Implementation

Implementing SMS OTP into your systems is straightforward and doesn’t require significant infrastructure changes or extensive resources. At Prelude, we’ve witnessed companies launch their OTP systems in under an hour with just a single team member!

Scalability

As mentioned, SMS is one of the most universally accessible channels of communication without the need for an internet connection or advanced smartphones.

This means that businesses can reach a broader user base, connecting with customers across diverse regions. 

Additionally, you can expand to new markets without needing to rely on new vendors or channels, especially if you work with an OTP service that already integrates multiple providers.

SMS OTP Best Practices

Implementing SMS OTPs involves more than just sending codes. Here are a few best practices to follow to ensure enhanced security, reduced costs and a smooth user experience. 

1. Message content: SMS costs are charged by character length so keep the content of your SMS short and straight to the point. The SMS should start with the code, allowing users to easily enter it into your app without constantly having to switch back and forth between the message and the login page. Avoid any unnecessary jargon and instead opt for concise language that clearly states the purpose of the OTP and your brand or app name. 

2. Timing: This should go without saying but make sure that you send SMS OTPs promptly without delays. Set a strict expiration time to limit attacks.

3. Choose a reliable OTP provider: Partner with a reliable provider with a robust infrastructure known for their security and strong deliverability. 

4. Implement fallback options: If your user has a poor cellular network reception, it’s always best to have fallback options such as WhatsApp or Viber to send your OTP. Aim for an OTP provider that can do this automatically for you.

5. Allow retrying for OTPs: Users that don’t receive or use their OTP on time should be allowed to ask for a new one but still enforce a limit on how many times a user can request a code to prevent brute force attacks.

6. Fraud: To prevent malicious attacks, make sure to deploy a multi-layered defense strategy. Many OTP providers will usually implement anti-fraud measures to ensure your OTP system remains secure and cost-efficient. 

Effective OTP systems send fewer and smarter codes while minimizing risk and maximizing delivery.

How to Choose an OTP Provider

Efficient SMS OTP solutions go beyond simply sending codes. They focus on ensuring those codes reach legitimate users only and keep out attackers.

Choosing the right provider is essential to minimize risks associated with SMS OTPs and maintain security. Whether you’re using OTPs for account sign-ups, transactions, or password resets, your choice should prioritize reliability, security, and cost-efficiency at scale, all while delivering a seamless user experience. In the next section, we’ll explore the key factors to consider when making this decision.

Security & Fraud Prevention

With fraud and identity theft on the rise, having a robust, reliable and high-quality OTP infrastructure should be non-negotiable. Weak protection can lead to account takeovers, increased costs from abuse, and ultimately damage to user trust and conversion rates.

When evaluating providers, it’s important to look beyond basic OTP generation and validation. A strong OTP provider comes with robust fraud protection, advanced encryption standards, and compliance certifications (such as SOC2 or GDPR).

Make sure your OTP system comes with real-time traffic monitoring to immediately detect unusual and suspicious activity alongside number intelligence that can detect bots, spam, and fraud attempts before they cause damage. 

The goal is to stop fraud at the source, not after the OTP is delivered. 

Intelligent Routing & Multi-Channel Support

Relying on a single delivery route or channel increases the risk of failure, particularly for businesses with a global user base. A modern OTP provider should offer intelligent routing that dynamically selects the best delivery path based on performance, cost, and location.

Multi-routing ensures your SMS traffic can be distributed across multiple providers, so delivery remains uninterrupted even if a primary route fails. This strategy automatically chooses the next-best route to maximize delivery success and optimize cost-efficiency.

Combining multi-channel support with intelligent routing further enhances reliability and security. By falling back to alternate channels when needed, your users experience seamless authentication without disruption, maintaining both engagement and conversions.

Deliverability & Global Coverage

In the world of OTPs, speed is everything. In other words, OTPs must reach users quickly every time without fail. When evaluating OTP providers, look at their delivery success rates, which should ideally be 98% or higher, as well as their ability to perform consistently across different regions and carriers. 

A high-quality provider should be able to deliver OTPs consistently every time with proven performance across your key target regions. This is critical for global or expanding businesses.

Cost Optimization

As discussed, OTP costs can rapidly build up as a company scales. The goal is to balance cost considerations with reliability requirements. 

Look for providers that offer flexible and transparent pricing with clear breakdown by country and route. Whether it’s pay-as-you-go or monthly subscriptions, make sure you choose a provider that fits your budget and scales as you grow. 

Beyond pricing, intelligent routing and fraud prevention play a major role in cost control by reducing unnecessary sends and selecting the most efficient delivery paths.

Performance & Scalability 

One key feature that your OTP system should provide is reliability as any performance issues directly impact user access. 

Your OTP provider should be able to scale effortlessly as your business grows. An efficient OTP system should come with auto-scaling capabilities that can handle sudden spikes in traffic without degrading performance through auto-scaling infrastructure.

In other words, your SMS OTP provider should be able to handle varying traffic patterns and technical constraints across global markets. 

Customer Support

It’s important to know that when issues arise, you’ve got a dedicated customer support team that’s quick to respond to keep your authentication flows running smoothly at all times. 

This is an important factor especially when you consider that when authentication issues occur, this can have a direct impact on user access, conversions and revenue. Fast, effective support across multiple time zones is essential. 

Choose a provider with access to a team that understands your setup, helps troubleshoot issues in real time, and proactively alerts you to potential problems before they impact users.

Monitoring and Analytics

Access to a comprehensive analytics dashboard is essential for understanding and optimizing your OTP performance.

It should provide real-time visibility into key metrics such as delivery rates, conversion rates, authentication volumes, and time to verify. With the right insights, you can quickly identify issues, monitor latency, and track message status across different regions and carriers.

This will enable you to continuously optimize delivery performance, reduce failures and improve user experience. 

Ease of Integration

Ease of integration plays a key role in how quickly you can set up, deploy and scale your authentication system. 

Look for providers that offer clear, well-documented APIs and SDKs across multiple languages that enable fast and straightforward implementation. The solution should integrate seamlessly with your existing systems and workflows to accelerate time-to-market.

How to Implement SMS OTP in Your Application

Now that you’re convinced that your company needs SMS OTPs, let's outline the main steps to get you started on your OTP journey:

1. Choose Your OTP Service Provider

When it comes to choosing an OTP service provider, you will need to consider the features that come with it that will best suit your needs, whether it’s speed and reliability, ease of implementation, integrations or pricing (or all these features together) as discussed in the previous section.

Also make sure to check if the provider offers SDKs for your preferred programming language, to ease the integration process. For instance, Prelude provide SDKs for many popular languages such as Node, Go or Python.

2. Integrate the Provider SMS API

Once you made your choice, you can use your provider’s SMS API to integrate the OTP functionality into your application. Your provider should share with you an API key or token, so you can set up the service.

3. Test the Integration

Before going all-in with your provider, make sure to test the integration. You can do so by using test phone numbers to verify that messages are received correctly, then by monitoring logs in your provider’s dashboard to make sure your users receive their OTPs.

4. Monitor and Scale

Once everything runs smoothly for your users, dedicate some time going forward to monitor the costs and volume of SMS sent to keep track of your acquisition performance. Some providers like Prelude give access to their clients to real-time dashboards and analytics so they can understand better their user authentication KPIs and opportunities.

Get Started With SMS OTP Using Prelude Verify

You can send and verify a code in 2 minutes and 3 simple steps by integrating the Prelude Verify API from any language to start sending OTP messages to your users worldwide using multiple messaging channels.

Step 1: Sign up and get your API Key

To use Prelude’s verification services, you need an API key:

1. Create an account on Prelude.

2. Navigate to the Keys section in your Settings.

3. Generate a new API key and store it securely.

Your API key is required to authenticate requests and should be kept private.

Step 2: Send a verification code

To verify a phone number, the first step is to send a one-time password (OTP). Use the /v2/verification endpoint to trigger a message with a verification code. You can see all the different customizable parameters, such as code size or Sender ID, on our documentation.

Request example:

import os
from prelude_python_sdk import Prelude

client = Prelude()

verification = client.verification.create(
    target={
        "type": "phone_number",
        "value": "+30123456789",
    },
)

print(verification.id)

Response example:

{
  "id": "vrf_01jc0t6fwwfgfsq1md24mhyztj",
  "status": "success",
  "method": "message",
  "metadata": {
    "correlation_id": "<string>"
  },
  "request_id": "<string>"
}

Step 3: Check the verification code

Once the user receives the OTP, they enter it into your app. You then verify the code using the /v2/verification/check endpoint.

Request example:

import os
from prelude_python_sdk import Prelude

client = Prelude()

check = client.verification.check(
  target={
    "type": "phone_number",
    "value": "+30123456789",
  },
  code="123456",
)

print(check.id)

Response example:

{
  "id": "vrf_01jc0t6fwwfgfsq1md24mhyztj",
  "status": "success",
  "metadata": {
    "correlation_id": "<string>"
  },
  "request_id": "<string>"
}

In case of errors, such as invalid phone number or invalid request, find out how to troubleshoot them here.

Step 4: Send fraud signals

You're all set with Prelude already! This last step is optional (but highly recommended) as it will help you leverage our API to the fullest by enabling it to mitigate fraud attacks such as SMS pumping.

You can send over 50 user signals (device model, app version, battery level, and more) to Prelude through our Mobile SDKs (for iOS, Android and React Native) for the most accurate filtering possible.

You can also start opening new countries and new messaging channels (such as WhatsApp, RCS or Viber) depending on your user verification needs.

Verification & Security Delivered With SMS OTPs

There’s no doubt that SMS OTP adds an essential layer of protection to your application. It helps safeguard user accounts, reduce fraud, and build trust by ensuring that only legitimate users can access sensitive actions.

And the best part? It’s easy and quick to get started with deploying SMS systems and it’s just as quick and easy for users to use intuitively, requiring no additional apps or setup, which makes it an ideal starting point for businesses looking for strong authentication without introducing friction.

That’s not to say that SMS OTPs are immune to threats. In practice, many businesses encounter two common issues:

• Rising costs due to fraud charges, abuse or inefficient routing

• Striking that balance between affordability and reliability, especially when scaling across regions

By implementing key best practices and choosing the right OTP provider, businesses across various industries can utilize SMS OTPs to shield themselves from fraud while optimizing costs and delivering a more reliable user experience.

Start Your OTP Journey With Prelude

Solutions like Prelude are designed to tackle these challenges by combining fraud prevention, intelligent routing and cost optimization into a single platform. 

Prelude helps reduce SMS verification costs by 30-40% and improve conversion rates. Our services include lower costs for fraud protection, multi-routing options, and a transparent dashboard that shows SMS cost breakdowns and savings.

At the core of its approach is Prelude’s Watch API, which helps protect customers by blocking 99% of spam and fraud attacks by using a cross-signal risk scoring to identify spam with the best accuracy. By analyzing signals such as number reputation, device behavior, and SIM card changes, it can identify high-risk requests with high accuracy and prevent common attacks like SIM swapping.

The result is a more efficient OTP flow where messages are only sent to legitimate users, reducing fraud, improving deliverability and minimizing unnecessary expenses without having to resort to extreme measures like blocking entire regions. 

With advanced fraud detection and real-time analytics, businesses can confidently scale their authentication systems while maintaining both security and cost efficiency.

Ready to elevate your SMS OTP strategy? Explore how Prelude can help you optimize your authentication flow by booking a demo of our API or trying it out today!

FAQs