Understanding OTPs in Credit Card Transactions

Here’s all you need to know about OTPs to be secure! Want to explore credit card options?

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A credit card is a convenient way to make purchases and comes with multiple layers of security. To make purchases at a retail outlet or pay for dining purposes, you must enter your 4-digit pin. When you use your credit card to make online purchases like booking a flight or shopping, you mention your 3-digit credit card CVV number. However, your CVV number is not the only level of security as banks are constantly upgrading their security features to avoid instances of fraud. There is now something known as the One-Time Password (OTP) in credit card transactions.

Use of OTP in Credit Card Transactions

OTP is a 6-digit number that adds an extra level of security to all your online and banking transactions. Any transaction done without the use of OTP can prove to be risky as it removed the added layer of security provided to the customer. Now that you have an idea of what is an OTP that is used during credit card transactions, here is some information on various types of transactions where an OTP is necessary.

1. Online Transactions

These days, we all love to shop online and use our credit cards to make payments. CVV is one security measure provided by the bank to help reduce any risks but it may be worrisome if someone has all your credit card details. Hence, OTP can prevent such unfavourable incidents from taking place as the bank shares it only on your registered phone number or email address of the customer, proving it to be a safe and secure online transaction.

2. Utility Bill Payments

Making payments on your utilities with your credit card is an easy way to handle your expenses and pay your bills on time. Setting up an automatic bill payment facility can ensure regular utility-bill payments using a credit card. However, it is essential to note that no payments go through the credit card without using an OTP for dual authorization of the transaction.

3. ATM Withdrawals

Certain ATMs come with an extra step of security during cash withdrawals. You will be asked to enter your phone number once you enter the required credit card details. An OTP will be sent to your phone number via SMS. You must enter that OTP to authenticate the withdrawal and proceed to accept your cash.

Dos and Don’ts

Here are the crucial dos and don’ts of using credit card OTPs:

Dos	Don’ts
Ensure that the website you’re submitting your OTP to is safe	Do not answer emails that ask you for sensitive information
Update your antivirus and firewall software	Do not disclose your CVV, PIN, expiration date, and other credit card information to anyone

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How many times can I use the same OTP?

You cannot use the same OTP again as it is valid for only one transaction at a time for a span of 10 minutes only.

Does the bank providing credit cards apply any charges for OTP?

To request an OTP for authorising payments, the bank does not levy any charges on the credit cardholder.

In what different ways can I request an OTP?

An OTP can be requested in various ways – one way is by making a phone call to the concerned bank and another way could be by sending an SMS request to the bank for the OTP to be generated.

Can credit card OTPs be misused?

There are various instances where a credit card OTP can be misused – if the cardholder shares the OTP with a person, who is already in possession of the card details it can be misused. Another way by which a credit card OTP can be misused is by not updating your phone number with the bank. That way your OTP will not be sent to the old number.

Does applying for an SBI credit card require an OTP?

You do not need an OTP to apply for an SBI credit card. It may be required only to authorise any payments made through the credit card.

Is OTP required for credit card transactions?

Most online credit card transactions require an OTP for the payment to go through. Unless it is conducted via a payment gateway, an OTP is not used as a second level of security for completing the transaction. Additionally, for offline transactions, an OTP will not be required as all one may need to do is swipe their credit card and enter the 4-digit PIN.

Can we make credit card payments without an OTP?

While conducting an offline transaction, all one may need to do is swipe their credit card and enter the 4-digit credit card PIN. This will be a single level of security for authorising the transactions. While conducting an online transaction, an OTP is used as a second level of security for completing a payment.