Still Using SMS OTP? See What It’s Really Costing Your Business

A customer opens an account, verifies their identity, and starts using your service. On their next visit, they wait for a text message and enter a six-digit code. Then they do it again.

Each challenge may seem like small, inconsequential actions, but across your customer base, those moments add up to messaging costs, delays, support requests, and abandoned journeys. They also create opportunities for attackers to intercept a code or convince a customer to share it.

Understanding that impact is the first step toward reducing it. Prove’s Beyond OTP Assessment helps you evaluate where SMS OTP is creating the greatest burden and identify a practical path toward Prove Unified Authentication.

Why SMS OTP became the default

SMS one-time passcodes became common for understandable reasons. They were familiar to customers, relatively easy to deploy, and added a layer of protection beyond a password alone.

Over time, that extra check became a routine part of onboarding, login, transactions, and account recovery. Customers began facing repeated challenges, even when a business already had signals that could help recognize them.

This is precisely what we highlight in our Beyond OTP Assessment: it demonstrates how every identity context can be used more effectively so customers spend less time actively proving who they are. Improving delivery can address part of the experience, but reducing how often a code is needed addresses the recurring burden.

The business impact goes beyond the SMS bill

Message pricing is one visible cost of OTP. The full economic impact stretches across the customer journey.

A delayed code can interrupt an account opening. A failed delivery can prompt a resend, then a support request. Repeated challenges can frustrate returning customers and create barriers for people who cannot reliably receive or access a text message.

To understand the burden, look at several connected areas:

• Messaging and delivery: Charges for codes, retries, and resends, along with dependence on carriers and messaging providers.
• Conversion: Customers who leave during onboarding, account opening, or authentication.
• Support and operations: Time spent resolving missing codes, delivery failures, and access problems across regions.
• Customer experience: Waiting, switching between apps, and repeating steps to access an existing account.
• Fraud exposure: Codes that can be phished, intercepted, or transferred, along with unwanted traffic that drives message volume.

Consider a returning customer who requests a code twice, contacts support, and leaves before completing a transaction. The message charges capture only a small part of that experience.

An effective assessment connects delivery performance to what happens next: whether customers gain access, complete their journey, or give up.

Introducing the Beyond OTP Assessment

The Beyond OTP Assessment brings those factors together to help you understand your organization's dependence on SMS OTP. It takes about two minutes, and reasonable estimates are enough to establish a directional baseline.

Using your inputs, it evaluates customer and authentication volume, messaging costs, delivery time, abandonment and failure rates, retry behavior, unwanted or fraudulent traffic, and regional or operational challenges.

This broader view helps distinguish a delivery issue from a larger dependency on repeated authentication. It also helps identify where a change could have the most value, whether that is account opening, returning-user login, or another high-volume journey.

What your assessment results tell you

Your results translate those inputs into a starting point for action. You'll receive:

• A Beyond OTP Impact Score and an impact level of Elevated, Significant, or Substantial.
• An estimated savings opportunity showing what reducing unnecessary OTP usage could mean economically.
• A view of customer experience and fraud exposure showing how delivery, retries, abandonment, and unwanted traffic may contribute to cost and risk.
• A tailored action plan and checklist for evolving toward Unified Authentication.

Your score combines inputs across cost, customer experience, performance, and risk, with each evaluated against defined ranges. The financial estimate is calculated separately using bounded assumptions. You can request a demo to explore your results and discuss a more detailed analysis with Prove.

The results provide a directional starting point for a deeper business case. Actual savings depend on your authentication flows, traffic, and implementation. Use your internal metrics to refine the opportunity and decide what to test.

Build on your existing authentication infrastructure

Moving beyond OTP can begin within the infrastructure you already have.

Organizations can augment SMS OTP while introducing passive authentication for eligible, low-risk customers. Codes can remain available as a targeted step-up or fallback for customers and situations that still require them.

Start with one priority journey. Establish a baseline for completion rates, fraud performance, support demand, and messaging volume. Then run a controlled pilot with clear guardrails for when additional verification is required.

That approach gives security, product, and operations teams a shared way to assess progress. You can reduce dependence on SMS over time while continuing to support the needs of your customer base.

Recognize trusted customers with Unified Authentication

Prove Unified Authentication coordinates identity verification and authentication using persistent identity, current signals, and risk-based decisions. It helps recognize trusted customers and determine when additional assurance is needed.

The approach brings together four elements:

• Possession: Mobile Auth helps confirm possession of the device tied to the customer's identity.
• Reputation: Device risk signals help assess whether the device and associated activity appear legitimate.
• Ownership: Verification connects the person to the account and credential.
• Persistence: Prove Key, ProveID, and Identity Management help carry identity context across sessions, devices, and phone-number changes.

Together, these signals support a shift from repeated proof to persistent trust. Eligible customers can be recognized behind the scenes, while active challenges are reserved for circumstances that warrant additional assurance.

Persistent trust still requires reassessing risk. A recovery request, unfamiliar device, or other meaningful change should inform the next decision. Carrying identity context forward gives the business more information to work with at those moments.

Reducing routine challenges can help lower messaging and support costs, improve the customer experience, and strengthen authentication through a broader set of signals.

Connect authentication to the customer lifecycle

The identity relationship begins before the next login.

Prove Pre-Fill helps establish identity and streamline onboarding at the start of the relationship. Unified Authentication helps recognize customers during future interactions. Identity Management helps maintain continuity as customer information and circumstances change.

The Prove Identity Platform connects these capabilities with shared identity signals and fraud intelligence. Information established during onboarding can inform later authentication, servicing, transactions, and recovery.

For a business already using Pre-Fill, that creates a natural next question: how can the trust established at account opening support the customer's next interaction?

Connecting those decisions helps reduce unnecessary repetition and address gaps between separate checkpoints. It also makes authentication part of an ongoing customer relationship, with friction guided by risk.

Start measuring your OTP impact

Your path beyond OTP starts with understanding where it creates the greatest cost, friction, and operational burden.

The Beyond OTP Assessment gives you a clearer view of that impact and a tailored action plan for moving toward Unified Authentication. Use it to identify a priority journey, evaluate the opportunity, and plan a measurable next step.

Take the Beyond OTP Assessment.