What is OTP in a credit card transaction?

Credit Cards enable you to make online and offline payments up to the credit limit applicable to your card. They offer undeniable convenience without having funds debited from your Savings Account immediately. However, as more and more people use Credit Cards for online transactions, they may invite trouble from cyber criminals looking to pry on their financial information online. Hence, Credit Card issuers use One-time Passwords (OTPs) to authenticate users' identities and enhance safety levels. Here's everything you need to know about OTP in Credit Card transactions.

One-time Password or OTP is a numerical code sent to your Registered Mobile Number (RMN) while you make online Credit Card transactions. The code comprises a four to six-digit passcode randomly generated through automated software when your bank or Credit Card company receives the transaction request. The code is valid for a limited period, and the payment amount is deducted from your Credit Card account only after you authenticate the transaction through OTP.

While using your Credit Card online, you can authenticate your transactions using OTP. Here's how the process works:

• Step 1: At checkout, you input your name, Credit Card number, CVV, and expiry date on the transaction page.
• Step 2: The website or app where you choose to shop or make a Credit Card payment asks you for an OTP to confirm it's you.
• Step 3: You can check your phone to find the four or six-digit code sent to your mobile number registered with the Credit Card provider.
• Step 4: Enter the OTP to confirm your identity and authenticate the transaction.
• Step 5: After you provide the OTP, the payment is processed instantly, and you receive a real-time notification.

To maximise the security offered by OTPs, it's important to follow these guidelines when verifying online credit card transactions:

Keep Your OTP Private

Treat your OTP as a confidential code. Never share it with anyone, and avoid allowing others to use your credit card, especially if it requires sharing the OTP via call or message.

Use Trusted Channels

Only enter OTPs on official and secure websites or apps. Instead of clicking suspicious links, manually search for the merchant's site. Always verify the authenticity of the website before proceeding with any transactions.

Only Provide OTP During Transactions

Legitimate banks and companies will never request your OTP for unrelated transactions. If someone claiming to represent your bank asks for your OTP outside of a transaction context, do not share it.

Keep Your Contact Information Updated

If you change your mobile number, inform your bank or credit card company immediately. This ensures you continue receiving SMS alerts for transactions and OTPs to verify your identity.

Secure Your Device

Ensure your smartphone is locked with a strong password or biometric authentication. This prevents unauthorised access, safeguarding your OTP and maintaining the integrity of your transactions.

Using OTP in Credit Card transactions proves beneficial in the following ways:

Easy Processing

Your Credit Card transactions are easily processed when you complete the security verification process via OTP. It is a one-step process where you need to input the OTP sent to your mobile number and complete the transaction.

Alert on Transactions

As OTPs indicate the initiation of payments, they are a good way of tracking your transactions. If you receive an OTP notification without initiating a Credit Card transaction, you should suspect someone else is using your card and take the necessary protective steps.

Real-time Verification 

OTPs are generated instantly and are valid only for a few minutes. As a result, even if someone tries to breach your Credit Card information and trace the OTP through hacking, they will fail as the tracing takes time. Before they can access your OTP, it will expire.

Additional Layer of Security

As the OTP is automatically generated and keeps changing for each Credit Card transaction, it is impossible to guess or replicate it. It acts as an additional layer of security besides the password or PIN you use while making payments through digital payment apps or Net Banking.

Wide Applicability

OTP applies to a wide range of Credit Card transactions. You can use it to safely shop online, pay bills, make fund transfers, make payments during financial emergencies, settle loan EMIs, etc.

Understanding what OTP in Credit Card transactions is and using it wisely enables you to carry out your online payments securely. To provide you with the best experience, HDFC Bank offers an OTP checkout facility powered by Visa/Mastercard SecureCode. The OTP is generated instantly under this facility, eliminating the need for passwords. You can simply input the OTP sent to your mobile number on the merchant's website and complete the transaction without any worries.

Conduct Credit Card transactions via secure OTPs with HDFC Bank.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals are at the sole discretion of HDFC Bank Limited. Credit Card approvals are subject to documentation and verification per the bank's requirements. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.