What Is OTP In Credit Card Transaction?

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28 APRIL, 2023
Shopping online and paying bills has never been easier, thanks to the convenience of online banking and credit card services. They have revolutionised how we make online transactions and do shopping, providing comfort and security.
With just a few clicks, people can purchase items from anywhere in the world from their laptops or smartphones.
Online banking and credit cards offer a secure and convenient way to shop, allowing users to transfer funds easily, make payments, and manage finances.
By taking advantage of these services, shoppers can save time and money and make informed decisions when making purchases.
However, there are potential security risks when paying online through a credit card. Thanks to OTPs, thieves cannot steal money from a person, letting individuals do online transactions with complete security. So, what is the OTP in credit card transactions? Read on to find more.
What is OTP in credit card transactions?
OTP stands for One-Time Password. It is a unique combination of four to six randomly generated numerical digits to authenticate online banking and credit card transactions.
OTPs help protect one’s personal information and financial data from hackers by greatly reducing the chances of identity theft. OTPs also act as an extra layer of security, confirming that it was indeed the person who initiated the transaction.
An OTP adds a layer of security above a user-generated static password. It is only valid for one transaction or login session. Nowadays, there is no credit card transaction without OTP.
How OTP works?
Suppose a person uses an online platform to buy a washing machine. Once they select the product and go to the payment page, they have to choose the payment method.
Consider that they choose a credit card. They must now input the card information. After entering the account information to complete an online transaction, they get redirected to a screen where they have to click “Get My OTP number.”
The bank sends (SMS/email) the OTP to the registered mobile number and email address. The person has to input the OTP to finish the authentication procedure, which is only valid for a short period. They have two additional opportunities to click on “Resend OTP” if they do not get the OTP immediately.
By entering the OTP, the cardholder can confirm that the legitimate cardholder is making the purchase.
OTPs are a simple but effective way of authenticating cardholders and can help reduce the risk of fraudulent activity on credit cards.
Why is an OTP necessary for credit card transactions?
The importance of an OTP for credit card transactions cannot be underestimated. Today, an OTP provides the user with a layer of security and assurance that their information is secure and their transactions are not vulnerable to fraud.
By providing an extra layer of authentication, OTPs ensure that the person making the transaction is the rightful owner of the credit card.
This extra layer of security helps protect the consumer, the merchant, and any other involved parties. OTPs ensure that the transaction is legitimate and that the user is who they say they are, preventing fraud and unauthorised access.
Pros of using OTP in credit card transactions
Using OTP in credit card transactions has numerous benefits; some of them are:
Cons of using OTP in credit card transactions
OTPs have some flaws despite their advantages.
How to secure credit card transactions?
Credit cards have become an invaluable tool for safe and secure online transactions, with many banks offering attractive rewards and protection against fraud.
However, to further enhance the security of the best credit card in India, consider the following advice:
Conclusion
Credit cards are a safe, reliable, and convenient payment method for online transactions, provided customers take the necessary precautions to protect their sensitive personal and financial details.
By understanding how the best credit card in India work and ensuring only to use trusted websites, customers can confidently make secure online purchases with their credit cards.
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