What are the key drawbacks of SMS-based authentication?

Key Drawbacks of SMS-Based Authentication#

SMS-based authentication is widely used but comes with significant limitations that impact security, cost, reliability, and user experience.

1. Security Risks#

SMS authentication is highly vulnerable to attacks, making it an unreliable security measure:

• Phishing Attacks: Users can be tricked into entering their SMS OTP on fraudulent websites, allowing attackers to gain unauthorized access.
• SIM Swapping: Hackers can steal a user’s phone number by fraudulently transferring it to another SIM card, intercepting SMS OTPs.
• SMS Traffic Pumping Fraud: Attackers inflate SMS traffic to generate revenue at the expense of businesses, costing enterprises millions.
• Lack of Encryption: SMS messages travel in plaintext, making them susceptible to interception by attackers.

2. High Costs#

Using SMS for authentication is expensive, especially for large-scale enterprises:

• Per-Message Costs: Businesses pay $0.01 to$0.20 per SMS, which accumulates quickly.
• Operational Expenses: Managing SMS-based authentication includes vendor fees, maintenance, and user support costs.
• Fraud-Related Costs: Companies lose millions due to SMS fraud, such as SMS pumping attacks.

3. Reliability Issues#

SMS messages are not always delivered promptly, creating frustration for users and risks for businesses:

• Network Delays: SMS OTPs may arrive late or not at all due to network congestion or carrier issues.
• Blocked SMS in Certain Regions: Some countries restrict international SMS messages, making authentication unreliable.
• Carrier Filtering: SMS messages can be flagged as spam and never reach the user.

4. Poor User Experience (UX)#

SMS authentication disrupts the user journey and adds unnecessary friction:

• Multi-Device Hassle: Users must switch between devices to retrieve and enter OTPs.
• Desktop Login Inconvenience: Unlike mobile autofill, desktop users must manually type OTPs.
• Authentication Fatigue: Users find entering OTPs annoying and disruptive, leading to login abandonment.

Passkeys: A Secure and Cost-Effective Alternative#

To overcome these limitations, many organizations are replacing SMS authentication with passkeys, a phishing-resistant, cost-effective, and user-friendly alternative. Passkeys eliminate OTPs entirely, enhancing security and user experience while reducing fraud and cutting authentication costs by up to 90%.

Read the full article#

About Corbado

Corbado is the Authentication Intelligence Platform for CIAM teams running consumer authentication at scale. We help you see what IDP logs and generic analytics tools can't: where passkeys, passwords, OTP, social login and fallback journeys succeed, stall or fail, which devices and browsers create friction, and when an OS update silently breaks login. Two products: Corbado Observe layers process mining and observability across authentication journeys. Corbado Connect adds managed passkeys with analytics built in alongside your IDP. VicRoads runs passkeys for 5M+ users with Corbado (+80% passkey activation). Talk to a Passkey Expert →