What does OTP mean in banking – If you are looking to understand the term “OTP” and its application in banking, this guide will give you ample idea of what existed on this topic.
What is an “OTP code?”
The term “OTP” means “One Time Password,” which also is an automatically generated numeric or alphanumeric string of characters that authenticates a user for a particular or single transaction /login session.
The OTP expires after a few minutes regardless if it’s being used to authenticate the transaction which it was generated for.
In essence, “OTP” is a security layer that provides additional safety/protection against theft and unauthorized access into an existing user account, be it in banking or otherwise.
Benefits of One Time Password (OTP)
1. The One Time Password becomes invalid in minutes, this prevents attackers from obtaining and using the secret codes and reusing them.
2. The OTP outweighs all the security hiccups the administrator or the security managers at the back-end team of the bank have to face.
3. Bad or weak passwords, sharing of credentials, password composition rules, or reuse of the same password on multiple accounts and systems are all redundant with the OTP-generated algorithm.
4. The breach of security is minimal given that OTP is only valid for a few minutes.
Illustration on What OTP Means in banking
Most Mobile banking apps and cards require an “OTP” to authenticate transactions.
Mr. Michael Ejike who happens to be a Polaris bank customer wants to transfer money from his Polaris experience to a third party, having keyed in the transfer he’ll be required to enter an “OTP” sent to his SMS SIM card linked to his bank account or email address whichever applies.
To add to it, there are instances where you wish to complete a payment in an online shop, the “OTP” is the most time required to complete such payments, here’s to ensure that whoever is consummating the transaction is the rightful owner of such credit/debit card being used.
The “OTP” is usually made of a 4-digit number, sometimes could be alphanumeric just as designed by the software that generates it.
It’s often referred to as a second-level authentication
Frequently asked questions on what does OTP mean in banking
Meaning of OTP in Face bank – OTP in the First bank is a string of codes automatically and instantly sent to your mobile number or email registered with your First bank MasterCard after you have started the transaction and entered your card details.
Meaning of OTP in GTBank – When transacting with at any of the participating merchant’s sites with your Naira or Dollar card/Visa or MasterCard, the one-time password is a 6-digit numeric code requested and can be obtained via SMS, Email, or GTBank hardware token.
Meaning of OTP in Zenith bank – For Zenith bank, you can as well as generate an e-Token app, a mobile application that generates one-time Passwords (OTPs) used in the authentication of electronic transactions.
The Zenith bank OTP is a series of characters that automatically authenticates the user for a single transaction or session, it is also an alternative to the Hardware Token.
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