What is SMS Authentication? A Guide to Secure Verification

Senior Writer: Jainy Patel

Reading Time: 8 Minutes

Published : March 28, 2025

Have you ever received a text message containing a code when you’re logging into your bank account or email? This is an example of SMS authentication in action. It is a simple security measure that sends a one-time password (OTP) to your phone via text message to verify your identity.

With the increasing threats to cyber society and security, businesses and individuals have long relied on SMS authentication to provide an extra layer of security. But is this really the best option? In this blog, we will discuss how SMS authentication works, its pros and cons, and security-proof alternatives that exist.

What Is SMS Authentication?

SMS authentication is a security process that verifies a user’s identity by sending a one-time password via text message to their registered phone number. This code, known as an SMS authentication number, is entered into a login form to prove the person attempting to access the account owns the registered phone number.

This process is commonly used in various online services, such as:

• Banking apps (to confirm transactions or logins)
• Email services (like Gmail and Outlook)
• E-commerce platforms (to protect customer accounts)
• Social media accounts (Facebook, Instagram, Twitter, etc.)

SMS authentication plays a major role in two-factor authentication (2FA) and multi-factor authentication (MFA).

• Two-Factor Authentication (2FA): Two-factor authentication SMS mandates using the SMS code to authenticate alongside the password to let you log in. Even if a hacker has stolen someone’s password, it becomes impossible to log into the account without the SMS code.
• Multi-factor authentication (MFA) expands on the notion of 2FA by adding multiple verification factors, such as fingerprint, face scan, or security key. This makes it even harder for unlawful access to occur.

With the process of text message authentication, organizations have been able to considerably curb the chances of password hacking or weak passwords resulting in security breaches. However, the methodology is not without lapses, as shall be discussed in subsequent sections. 

How Does SMS Authentication Work?

The process of SMS authentication follows a simple but effective structure:

Step 1: User login attempt: When a user tries to log in, the system checks if their account requires SMS authentication.

Step 2: Sending the SMS Code: An OTP is created and sent to your phone via text for logging in or transactions. This code is unique and only valid for a short time.

Step 3: User Enters the Code: Once you get the code on your phone, you enter it into the required field on the website or app.

Step 4: Verification Process: If you enter the correct code, access is granted. If not, you need to request a new code. 

This method makes sure that only individuals with access to the registered phone number can log in, although some hackers have developed ways to bypass this security measure. 

SMS Authentication Codes – Types of One-Time Passwords (OTPs)

One-time passwords are at the core of text authentication. These passwords are temporary codes used to verify a user’s identity during login or transactions. Instead of relying on a static password that can be reused, OTPs ensure that each login attempt requires a fresh code.

There are two primary types of OTPs used in authentication SMS:

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

A Time-Based One-Time Password (TOTP) is an OTP that expires after a short period, typically 30 to 60 seconds. If the user doesn’t enter the code within this window, it becomes invalid, and they must request a new one.

How TOTP Works:

Step 1: The user attempts to log in to an account.

Step 2: The system generates a random 6- or 8-digit code.

Step 3: The code is sent via SMS authentication number to the user’s phone.

Step 4: The user enters the code within the valid timeframe (30-60 seconds).

Step 5: If entered correctly, the system grants access.

Why TOTP is Used:

• Prevents attackers from reusing stolen or intercepted OTPs.
• Reduces the risk of brute force attacks since codes expire quickly.
• Enhances security by ensuring each OTP is short-lived.

Example of TOTP in Action:

2. Hash-Based One-Time Password (HOTP)

A Hash-Based One-Time Password (HOTP) is another type of OTP, but unlike TOTP, it does not have a fixed expiration time. Instead, it remains valid until it is used.

How HOTP Works:

Step 1: The system generates a unique OTP based on a mathematical algorithm.

Step 2: The code is sent to the user via SMS validation.

Step 3: The user enters the OTP during login.

Step 4: Once entered, the OTP is marked as used and cannot be reused.

Why HOTP is Used:

• Ideal for situations where users might not receive an SMS immediately.
• Works well in regions with poor network connectivity.
• Prevents time-sensitive issues, as the OTP remains valid until used.

Example of HOTP in Action:

Which OTP is More Secure?

TOTP is generally considered more secure than HOTP because it limits the time window for attackers to use a stolen OTP. However, both methods provide better security than traditional passwords alone.

Pros of SMS Authentication

While SMS authentication may not be foolproof, it is still one of the most popular security measures. Most organizations still trust it because:

1. Simple and User-Friendly

It is a very low-threshold security mechanism since users do not need to install any special software or apps; they only need a phone capable of receiving ordinary text messages.

Example: When you log in to an online bank account and receive a text message with the authentication code, you just have to type it on the website. This is useful for making bank accounts complex without making them ambiguous and thus difficult to use.

2. Universally Accessible

Unlike application-based authentication, which requires a smartphone, SMS authentication can work on any mobile phone. This is beneficial to businesses with customers in areas where smartphones or stable internet connections are scarce.

3. No Additional Hardware or Software Required

Some security means, personalized electronic keys or biometric authentication, demand the use of only specialized devices. With the grace of SMS authentication, you need nothing else, just your phone number.

This provides a low-cost solution for a company that requires higher security without paying a lot for authentication methods.

4. Works Even Without the Internet

One very major advantage of text message-based authentication is that it does not need internet access. While authenticator apps and email verification systems still need Wi-Fi or mobile data, SMS works by means of the cellular network.

Thus, it can be useful even in areas with poor internet access, ensuring that users can still authenticate their identities even when offline. 

5. Adds an Extra Layer of Security

SMS authentication is not one of the most secure ways of ensuring safety, but it is far more likely to be safer than using a password alone. Even if a hacker managed to steal someone’s password, they would find it impossible to complete the login process without access to the phone.

For instance, if a cybercriminal were to compromise a user’s email password through a data breach, an additional step still adds yet another level of complication, as the hacker would require the SMS number to gain entry.

Cons and Security Risks of SMS Authentication

Despite its pros, SMS authentication has serious security and usability concerns. Thus, several cyber experts are urging the use of alternative authentication methods.

1. Vulnerable to SIM Swapping Attacks

SIM-swap attacks are one of the biggest threats to SMS authentication. In this attack, criminals tend to persuade mobile carriers to transfer a phone number assigned to a victim to another SIM card under their control.

Once the hacking is successful, the sim-swapping experts control the account and gain access to the phone by using text codes for validation.

2. Susceptible to Phishing and Social Engineering

Hackers use phishing emails, counterfeit websites, or fraudulent telephone calls to lure users into disclosing an SMS authentication number.

Hackers might send out fake emails pretending to represent a bank, asking a user to report their text authentication code on a counterfeit website. If the victim responds and succumbs to this trap, that code grants the hacker access to their account and gives them control of it. 

3. SMS Messages Can Be Intercepted

Unlike other mechanisms for authentication, SMS messages are sent without encryption, which makes them open to interception by anyone. By malware or other kinds of attacks exploiting flaws in mobile networks, an attacker can, in certain circumstances, read SMS messages and get command codes for logging in.

4. Not Secure for High-Risk Transactions

While SMS authentication is helpful for general logging in, it is not recommended for very sensitive actions such as financial transactions or accessing critical business information.

Now, many financial institutions and enterprise security teams have begun to discourage the use of SMS validation for any high-risk transactions, urging organizations to adopt MFA or passwordless credentialing instead.

5. Requires A Mobile Network – No Signal, No Access

While codes for app-based authentication can be captured offline, SMS messages allow authentication thus—the SMS does need an active mobile network for receipt. Thus, for example, in case the user is in a low-signal region or traveling to another country with no roaming, SMS authentication codes may not be delivered to the user.

Example: A traveling executive who is unable to receive an SMS authentication number en-route will not be able to access corporate email. 

Modern Authentication Methods

With the increasing number of cyber threats, businesses are shifting away from SMS authentication to stronger security methods. Here are some of the most secure and advanced authentication alternatives available today:

1. Multi-Factor Authentication (MFA) – Combining Multiple Methods

Multi-factor authentication (MFA) enhances security by requiring users to verify their identity through multiple methods instead of just an authentication SMS.

MFA uses three primary types of authentication factors:

• Something You Know – Password, PIN, or security question.
• Something You Have – SMS OTP, authentication app, or a physical security key.
• Something You Are – Biometric data such as fingerprint, face recognition, or retina scan.

By combining two or more of these factors, MFA makes it significantly harder for hackers to break into accounts.

Example of MFA in Action:

2. Passwordless Authentication

Passwords are the weakest link in the cybersecurity chain because they are reused, guessed, and easily stolen. Passwordless authentication aims to replace passwords altogether, allowing for easier and safer login processes.

• Biometric authentication – Fingerprint, facial recognition, or voice recognition.
• Security keys – Physical USB or NFC devices like YubiKey.
• Authenticator apps – Apps like Google Authenticator or Microsoft Authenticator that generate time-sensitive codes.

Example of Passwordless Authentication in Action:

3. Single Sign-On (SSO) for Seamless Access

Single Sign-On (SSO) allows users to log into multiple applications and services with a single unique authentication process.

How SSO Works:

Step 1: A user logs into one system using authentication SMS, biometrics, or another secure method.

Step 2: Once authenticated, the user is granted access to all connected applications without needing to re-login.

Benefits of SSO:

• Reduces password fatigue by not needing to remember multiple passwords.
• Increase in security by centralizing authentication.
• Better user experience by simplifying access to different services

Example of SSO in Action:

4. OAuth and OpenID Connect for Secure Authorization

 OAuth and OpenID Connect are modern authentication frameworks that allow users to log into websites or apps using credentials from third-party providers such as Google, Facebook, or Microsoft.

How OAuth and OpenID Connect Work:

Step 1: Instead of creating a new username and password for a website, you choose to sign in with Google.

Step 2: Google verifies your identity and grants permission to access the requested service.

Step 3: The website authenticates you based on Google’s confirmation without needing a separate password.

Why Businesses Prefer OAuth and OpenID Connect:

• Eliminates the need for SMS validation or passwords.
• Users don’t need to remember multiple login credentials.
• Reduces security risks associated with password reuse.

Example of OAuth in Action:

Big tech companies like Apple, Google, and Microsoft are moving towards Passkeys—an authentication method that eliminates passwords and SMS codes. These modern methods use cryptographic authentication, making them resistant to phishing and interception.

Also Explore: SMS shared Inbox

Conclusion

While SMS authentication has security risks, it remains a widely used method for verifying users. Businesses should assess their security needs and consider using SMS alongside more secure authentication methods, such as app-based OTPs or biometric verification.

As cyber threats evolve, businesses must rethink their authentication strategies. Implementing MFA, biometric authentication, or passwordless logins can significantly reduce security risks. If you’re looking to enhance your authentication systems, consult with cybersecurity experts or explore solutions like ControlHippo.

Updated : March 29, 2025

Jainy Patel

Jainy Patel is a content strategist who specializes in omnichannel communication solutions. She develops innovative marketing strategies that unify messaging across various channels, ensuring a consistent and engaging customer journey. Jainy is passionate about optimizing communication processes and crafting targeted content that resonates with audiences at every touchpoint.

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