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What is OTP in Credit Card Transactions?
Posted on Tuesday, August 27th, 2024 | By IndusInd Bank
An OTP or a one-time password has become an integral part of online transactions and banking in recent times. Especially for credit card transactions, OTP ensures an added layer of security and prevents misuse. This has become especially important as the number of digital payment fraud cases reported by banks increased by 70.64% to ₹2,604 crore in the six-month period from October 2023 to March 2024. This article discusses what OTP means in the context of credit cards, how it works, its benefits, and some tips for using OTP securely.
How OTP Works in Credit Card Transactions
To understand how OTP works, let us first learn what is OTP in a credit card transaction.
When you make an online purchase through a credit card, you need to fill in the card details like card number, expiry date, CVV number, etc. Once you submit this information, the bank initiates a request for OTP to verify it’s really you who is making the purchase.
An OTP in credit card transactions is a random four or six-digit numerical code sent to your registered mobile number or email ID. You need to enter this OTP while completing the transaction to confirm your identity.
The OTP is auto-generated and keeps changing, so it cannot be predicted or reused. Once you submit the valid OTP, the transaction is approved by the bank. If an incorrect OTP is entered multiple times, the bank may block the card to prevent misuse.
Importance of OTP in Credit Card Transactions
- Adds a layer of security over static passwords
- Ensures the cardholder alone can access the card and make purchases
- Prevents identity theft and misuse if card details are compromised
- Allows the bank to authenticate the real cardholder before approving transactions
- Simpler than remembering complex passwords for each transaction
- Can alert users if unauthorised transactions are attempted
Benefits of Using OTP in Credit Cards
Some key benefits of using OTP in credit card transactions include:
- Enhanced security for card and accounts
- A one-time password solution for users
- Instant alerts to cardholders for each transaction
- Faster processing of transactions after OTP verification
- Reduces fraud and identity theft risks
- Valid only for specific session, cannot be reused
- Simple and hassle free for customers
- Provides real-time confirmation of payments
- Wide applicability for varied transactions
Using OTP Securely for Credit Cards
| Security tip | Description |
| Confidentiality | Never share your OTP with anyone, including family, friends, or bank officials. You should be the only one who knows it |
| Website security | Before entering your card details, ensure you’re on a secure website. Look for “HTTPS” in the address bar instead of just “HTTP” |
| OTP sender verification | Verify that the OTP is sent from your bank’s registered phone number or email ID you have on file |
| Phishing awareness | Don’t click on unknown links or respond to suspicious requests for your OTP. Phishing scams try to trick you into revealing it |
| Device security | Keep an updated antivirus program running on the device you use for online transactions |
| Network security | Use secure Wi-Fi or mobile data for transactions. Avoid using public Wi-Fi networks |
| Transaction control | If you won’t be using your card for a long time, consider setting transaction limits with your bank |
| Account monitoring | Regularly monitor your credit card activity to identify any unauthorised OTP requests or suspicious transactions |
| Bank support | If you experience any issues with OTPs or suspect fraudulent activity, contact your bank immediately for assistance |
Also Read: What is Skimming of Credit Cards?
The Importance of Security
Keeping your credit card and related information secure is extremely important to avoid misuse and fraud. IndusInd Bank provides various facilities to ensure enhanced security for credit card transactions, like OTP-based purchases, updated EMV chip cards, secure online portals, etc. IndusIndBankCredit Cards with one-time passwordsalso come equipped with features like account monitoring, fraud detection, transaction alerts, and the ability to block the card instantly.
Apply for credit card seamlessly through the official IndusInd Bank website to get a credit card that follows stringent security protocols. IndusInd Bank offers a range of credit cards like the Legend Credit Card, Platinum RuPay Credit Card, EazyDiner Platinum Credit Card, etc., that provide a host of rewards and benefits while maintaining bank-level security. The competitive interest rates and instant online approval process further make IndusInd Bank Credit Cards a preferred choice for safe cashless transactions.
Conclusion
OTPs provide credit card users with a time sensitive, one-use password to authenticate transactions, preventing misuse while maintaining convenience. By understanding how it works and using OTPs securely, credit card holders can reap its benefits while enjoying peace of mind against online frauds.
Apply now for an IndusInd Bank Credit Card!
Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.
