Here’s why you’re not receiving OTPs in India right now


If you are making online payment in India with a card or through online banking, you need to go through a two-factor authentication process. 2FA is usually in the form of a one-time password (OTP), delivered by a text message.

However, many Indians have been facing payment issues since yesterday as their OTPs are not being delivered. This is disrupting many online and offline businesses that depend on digital payments.

The reason is India’s new SMS verification system. Telecom operators have started deploying blockchain-based distributed ledger (DLT) technology that is forcing telemarketers to sign up and avoid being identified as spam – and therefore blocked.. After registration, marketers need to write and deliver messages conform to pre-approved models.

Telecom operators will erase these messages to verify content and only send them to people who have given their consent to receive text messages from certain companies. You can read more about India’s New SMS System here.

According to many reports, this new system started rolling out yesterday, but as many banks and financial entities failed to register, customers were stuck in an OTP vacuum.

An Economic Times report noted that the delivery failure rate for OTPs was around 25% among major banks. It is a worrying sign for customers and banks.

Many officials from various telecom organizations told ET that the operators had sent out an invitation to banks and other major institutions to register their SMS templates.

Although this problem is to be determined, banks and other financial entities should not rely heavily on SMS and implement a secure way to provide OTP by alternative means.


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