🔐 OTP Is Not Authentication — It’s a Costly Side Effect: explore OTPshield
Source: Dev.to
A common misconception about OTP
When developers implement OTP via SMS, the mental model is usually:
“If the user asks for an OTP, we send one.”
That assumption hides two dangerous ideas:
- every request is legitimate
- the cost of sending is negligible
At scale, both assumptions break.
OTP as a monetized side effect
Every OTP request:
- 📲 triggers a paid SMS
- 💳 creates an external cost
- ⚙️ is executed automatically
From an attacker’s perspective, this is perfect:
- no authentication required
- no privilege escalation
- no vulnerability to exploit
Just repetition.
Why attackers love OTP endpoints
- 🌍 public by design
- ⚡ fast to automate
- 🔁 easy to replay
- 💰 expensive for defenders
Attackers don’t need success; they only need volume. OTP abuse is profitable because failure is irrelevant.
“But we have CAPTCHA and rate limits…”
Many teams respond with:
- CAPTCHA
- IP rate limiting
- retries limits
These help—but only partially.
- ❌ CAPTCHA can be bypassed or outsourced
- ❌ Rate limits don’t scale against distributed bots
- ❌ Phone numbers rotate faster than IPs
Result: you still send too many OTPs.
The missing concept: OTP as a privilege
Architectural shift
🔑 Requesting an OTP should be treated as a privilege, not a right.
Before issuing an OTP, the system should ask:
- Who is asking?
- Is this request typical?
- Does this number look legitimate?
- Is the cost justified?
Reframing the OTP flow
Traditional flow
Request OTP → Send SMS → Verify codeImproved flow
Request OTP
→ Risk evaluation
→ Decision
→ Send SMS (only if justified)A single decision point changes everything.
Signals available before sending SMS
Even without user authentication, you can analyze:
- 📱 Phone number type (real mobile vs. VOIP)
- 🕒 Request frequency and patterns
- 🌍 Geographic consistency
- 📊 Abuse history and reputation
None of this requires sending a message.
A minimal conditional OTP logic
if risk_score < threshold:
send_sms_otp()
else:
deny_or_challenge()OTP delivery becomes conditional.
An example implementation
We used an upstream risk‑analysis API (OTPShield) that evaluates phone numbers before any SMS provider is called. This allowed us to:
- block the majority of abusive requests
- preserve UX for real users
- significantly reduce SMS spend
No changes to the OTP code logic—just better gatekeeping.
What changes after this shift
- 📉 Fewer SMS sent
- 🔐 Fewer attack vectors
- 💰 Predictable billing
- 🧠 Security decisions move closer to intent
Most importantly: you stop paying attackers to test your system.
Who should care about this
The approach matters if you operate:
- consumer‑facing apps
- OTP‑based login or signup
- global phone number support
- non‑trivial SMS costs
If OTP is “cheap” for you, attackers haven’t noticed yet.
Final takeaway
OTP is not authentication. It’s a side effect with a price tag.
Treat OTP as a conditional action, not a default response, and both your security posture and cost structure improve immediately.