One-time passwords have been a reliable tool for businesses to protect their customers. However, the rising OTP cost forces companies to look for alternative, cheaper solutions. Is there an actual alternative to OTP?
Thankfully, there is. Once a novelty in fiction, now artificial intelligence (or AI, in short) is real and can be used to strengthen the authentication process. On top of that, it also costs less than any of the traditional OTPs.
But what actually makes OTP so expensive? And why opt for a power of AI that can reduce the expense of providing security to customers? All of these well-thought-out questions will be discussed in this article shortly.
Why are OTP Costs Expensive?
Does OTP cost money to the point it is too expensive? Yes, because of many key factors, ranging from the cost of managing the services to covering the disadvantages that it has. Here’s why:
Infrastructure Costs
In order to provide OTP services for business, third-party providers have to spend a lot on infrastructure costs. This is needed to ensure the stability of the OTP services so companies can use the services with fewer problems.
However, factors such as inflation and a surge of OTP uses globally make providers have to increase the price of OTP to maintain the service quality. This makes companies’ OTP budgets slowly increase to keep using it.
Communication Costs
How much does OTP cost for companies exactly? The answer depends on several factors and conditions that they have to agree upon. Here are several factors that can spike the costs of OTP service:
- Some OTP services use a pay-per-use model. For example, if the SMS OTP fee is $0.44/delivery, then companies will have to spend $44,000 for just 100,000 SMS.
- More advanced OTP systems demand more expensive costs. One-time passwords for 2FA or 3FA will cost companies more than just a simple OTP system due to its complexity.
- Companies that cater to users globally will need to pay international prices. This is because OTP prices for SMS international channels are much more expensive than local.
Security Vulnerability
A one-time password is not a perfect security system. It has vulnerabilities that can be exploited, and once a bad actor does it, companies will have to pay for their losses. How could the exploitation have happened?
One of the cases involves a social engineering method, where hackers directly obtain the OTP from targets by pretending to be official representatives. Other methods like interception and SIM swapping are also very common in practice.
In order to combat these malicious attempts, companies will have to spend yet another budget to increase the security system. Remember that OTP acts as an extra layer of protection, not a full-fledged security.
Delivery Issues
Not only does OTP cost a lot on its own, but there are delivery issues that also significantly increase it. Known issues with OTP delivery, such as:
- Failed to deliver OTP message to its intended recipient. Not only does this cause user friction, but companies still have to pay for any failed deliveries and their next delivery attempts.
- Customers might potentially get double OTP messages. This means companies will have to pay double while also confusing their customers.
AI Authentication: A Cost-Effective OTP Alternative
With knowledge about how much OTP costs money, it is understandable that companies are looking for alternatives. Thankfully, they will get one soon, with the power of artificial intelligence.
AI authentication is a next-level verification system that uses machine learning algorithms. Companies will be able to verify users using several dynamic factors, rather than relying on traditional passwords like OTP.
To verify users, AI will learn and process more complex data that is deemed as correct results. The AI then uses algorithms to determine which behavior is considered an anomaly and acts based on what it learns from data.
Benefits of AI Authentication
With AI being an alternative to OTP, what kind of benefits does it have compared to one-time passwords? Let’s analyze how artificial intelligence pushes authentication to the next level:
Enhanced Security
The main selling point of AI-powered authentication is the security benefits it offers. Here are several examples of how companies can benefit from using AI:
- Create a unique customer profile to determine whether an activity is suspicious. AI can learn from user behavior with the services, then check their current activities based on their historic data.
- Secure digital services with real-time authentication. This gives AI the ability to ensure the login attempt is made by a legitimate person, rather than a fraudster using deepfakes.
- Take measures based on the risk factors. AI will add more complex verification for suspicious massive balance transfers or login attempts in abnormal locations.
Improved User Experience
OTP is known to give a friction authentication process to users. Fortunately, AI can also ease the verification process, thanks to its frictionless authentication system.
This system allows users to login with just a single click, without needing a password or extra steps. As a result, users can seamlessly access digital services without typing a password or having to wait for an OTP message.
Cost-Efficient Solution
AI is by far the best solution for cheap and efficient authentication, even when compared to OTPless pricing. The reason is because companies don’t have to pay based on delivery.
With how secure AI-powered authentication is, companies don’t even need to pay more for additional protection systems. AI can do more with less money required.
Scalability and Adaptability
Nothing in artificial intelligence is set in stone. In other words, companies can easily customize AI to suit their needs. Whether to introduce what kind of services they sell or scale AI to give some exceptions with certain rules.
Keypaz: AI-Powered Seamless Authentication
If this AI technology is exactly what your company needs, then you can get the AI-powered authentication right away with Keypaz. By using AI-powered seamless authentication, Keypaz can give you these powerful benefits:
- Secure every interaction with advanced fraud prevention. Your company will be able to prevent fraudulent acts and OTP abuses while enhancing security in your services.
- Easily customizable with an adaptive framework. Design several systems for AI verification that suit your business conditions with ease.
- Protects your business with no breaks. AI’s real-time protection will ensure your company can detect early threats to prevent any potential losses.
All of these benefits come with a cheaper cost compared to OTP cost. In conclusion, your business can depend on the best verification system with AI, such as Keypaz. Ensure your business stays protected with the best tool.