One-Time Passwords (OTPs) explained: What they are, how they work, and when to use them

One-time passwords (OTPs) are a prevalent authentication method in modern applications, providing a secure alternative to static passwords through temporary, single-use codes. They come in various forms, such as SMS, email, and app-generated codes like HOTP and TOTP, each with its own advantages and challenges. OTPs reduce the risks associated with password storage and phishing, offering flexibility as either a primary authentication method or as a multi-factor authentication step. Despite their benefits, OTP delivery can be delayed, SMS-based OTPs are vulnerable to security threats like SIM swapping, and app-based OTPs can suffer from clock drift or synchronization issues. OTPs differ from standard passwords by eliminating the need for password storage and reducing reuse, while also introducing new friction points such as delivery delays and code entry. Compared to magic links, OTPs provide more control over the authentication process, allowing for additional risk checks before finalizing a login. Platforms like WorkOS offer solutions to simplify OTP implementation, handling complex aspects such as code generation, expiration, and validation, enabling developers to integrate secure OTP-based authentication quickly and efficiently.