SMS authentication & transactions

High quality SMS can be a powerful tool for enabling secure mobile authentication for a wide range of services and also as a transaction communications channel. As a secure, personal and high-speed communications mechanism, SMS interaction is the ideal route for these types of communication.

SMS can be used as a channel to activate or confirm micro-payments or transactions by enabling registered users to send and/or receive transaction requests. Additionally, authentication can be enabled by using an SMS gateway for the transmission of one time passwords (OTPs), enabling users to complete a transaction online in a secure and reliable fashion. 

OTPs are time-limited passwords that are handed out on a transaction-by-transaction basis. When a user signs up with a financial services provider they are asked to specify  an authorized mobile number. Then, each time they attempt a transaction – for example via online banking – an OTP is sent via a high quality SMS to the user’s authorized mobile number, which is then required to complete the login.

The global reach and ubiquity of SMS make it the ideal channel for authentication of online transactions. Speed and reliability are also essential in online transactions, and therefore the timely delivery of passwords and message integrity are the key for a successful authentication process.

• Lottery & gambling – The purchasing or distribution of lottery or gambling products can be facilitated via SMS
• Micro-payments & money transfer – Payments and transactions can be initiated or authenticated using SMS
• One time passwords & mTANs (Mobile Transaction Numbers) - The timely distribution of one-time- passwords to customers as part of a login or purchase procedure, from online banking to e-commerce transactions
• Mobile passwords - Means that staff can access applications, systems and confidential information according to their user rights. This gives organizsations the peace of mind that passwords are verified accordingly and thus that information is accessed only by the intended recipient

SMS authentication can be deployed by any service provider requiring an additional layer of account security. For example, banks and financial services businesses as well as retailers and e-commerce players looking to authenticate user identity can deploy SMS as an authentication factor. SMS verification capabilities can be deployed to increase usability and security of online transactions in almost any situation.