What is OTP? 4 things to note when using OTP

Buying, selling, and exchanging transactions with limited cash usage is a strong global development trend. Among the non-cash forms, wire transfer is the most intense. In order to ensure the highest security for all transactions through banks, OTP codes are applied. They are information that identifies the subject performing the transaction. Up to now, this form is still bringing high efficiency to all needs. Not everyone understand what is OTP, how to use this code. Join us to find the solution through the following article:

Table of Contents

What is OTP?

Security and safety is an activity focused on by the system of financial institutions around the world. Up to now, OTP security technology is still a bright spot among the banking services provided.


OTP stands for “One Time Password”, roughly translated as “one-time password”. When an individual has an electronic banking transaction or online payment transfer, the OTP code will appear. They are like a banker coming to verify the transaction subject matches the account holder or not.

The OTP is generated randomly with a combination of alphanumeric characters. This code will be sent to the phone number or email address that the account holder registered with the bank. Subjects need to enter correct OTP within the allotted time. The system will automatically compare. If the OTP matches the information, your transaction will be processed as required.

See also: How To Make A SIM Card Registration In The Philippines

Advantages and disadvantages of OTP codes

Advantages of OTP

The biggest advantage is the ability to add an extra layer of security to the checking account

  • Usage is simple, easy to understand and convenient
  • Low service fees
  • Popular in many forms of subject verification such as banking transactions, creating social media accounts, creating email accounts …

Disadvantages of OTP

  • The OTP can be revealed if the account holder does not keep the information carefully
  • Transactions through the internet can be attacked by hackers
  • In the form of OTP Token, more secure but have to pay additional costs to make a Token machine.

How long is the OTP valid for?

The validity time of each OTP code is only about 30 seconds to 2 minutes. During this time, if you do not enter OTP into the system or enter it incorrectly, the transaction will be canceled automatically. You can request to resend a new OTP to continue your transaction.

OTP is seen as the second layer of security. The first layer is that you log in with ID and password to check account information. Two-layer protection provides a higher level of security for money-related transactions through online banking systems.

In Philippines, not only banks but also create social media or email accounts also enter the OTP for verification. However, at this time, most of them display captcha entries, unlike banks that send OTP to mobile phones.

Also, the time to enter banking OTP is much faster than other forms. This is also an effective way to improve the security that OTP brings.

Types of OTP codes

This is a security service that brings convenience and safety to customers. Therefore, the fees charged to banks in each transfer include fees for providing OTPs.


Currently, there are 03 popular types of OTP provision in the world. Most banks in our country apply all 03 depending on specific needs of each customer


OTP codes are sent to you via SMS on your phone. The phone number received is the number you registered with your bank when opening a payment account.

All banks in Philippines use the form of SMS OTP, which is both fast and convenient. Users can copy the OTP directly from the message to the OTP in their account to make transactions.


What is OTP token? This is a fairly compact electronic device that is available upon request when you open a payment account at the bank. Often traders or business organizations often have to transfer money transactions for partners will use this method. Ordinary individuals are less than because to have a token device will have to pay a fee to make a machine for the bank.

Token machine will generate OTP by itself and transmit transaction information to the issuing bank, without the need for the account holder to be connected to the internet. This is also a way to limit the disclosure of account information.

See also: What is token?

Smart OTP

You need to be aware of protecting your OTP by yourself, not letting anyone know

Works similarly to the Token machine. But instead of having to pay for owning the device, Smart OTP through an application that generates OTP codes on phones. Each bank has its own Smart OTP app, serving both Android and iOS operating systems.

After installing this application to your device and successfully activated, you can receive the OTP automatically generated from the application and connect directly to the banking system.

What is important aware when receiving OTP codes

Secure OTP codes sent to your phone

The OTP is the last line of defense before funds in your account are transferred. Therefore, the protection of the OTP password is very important. The following actions are considered necessary

  • Set a password for your mobile phone with the sim number you registered with the bank
  • If possible, change your phone password from time to time
  • Immediately notify the bank switchboard to block your payment account when your phone is lost

Do not share the OTP with anyone

When mastering what the concept of OTP is, you will understand that this code cannot be let anyone know. The bank absolutely never asks you to read card details, bank accounts, ID codes, passwords to check your account over the phone. Therefore, it is even more impossible to ask for your OTP.

Even when booking, air tickets, movie tickets … via phone are not provided or entered information related to the payment account.

Strange link sent from a bank or other person

Absolutely do not click on any strange link, even if it is sent from the bank via email.

Hackers are increasingly sophisticated. Links with a domain name similar to a familiar bank name may cause you to press mistakenly if you do not pay attention, the virus can penetrate login account information with full ID and password.

Some online shop owners have warned that those who buy in bulk, from abroad will pay through international payment pages. They ask to click on the link to receive money, but in fact, they withdraw all the money in the shop owner’s account.

OTP codes have strange characters

OTP codes in Philippines usually only have letters or letters or both, letters can be lower or uppercase. If you receive OTP codes with strange characters such as @, Russian, Arabic … be absolutely wary, especially those who have the habit of copying OTP codes instead of entering each character manually.

You can wait for the system to resend another OTP. If this continues, suspend execution. Please contact the switchboard or directly to the bank.


Above is all information regarding what is OTP code. Currently, OTP is considered as an additional layer of security effectively for online transactions. However, in order to maximize the utility of OTP codes, the notes in the above mentioned transaction activities become extremely important. Technology like a double-edged sword, always make use of the good side the OTP code brings. At the same time, you should always be vigilant so that the bad guys cannot misappropriate this password and money in your account.

See also: OTP definition from Wikipedia

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