---
url: 'https://www.corbado.com/faq/sms-traffic-pumping-impact'
title: 'What is SMS traffic pumping & how does it impact businesses?'
description: 'SMS traffic pumping is a fraudulent scheme that exploits SMS authentication systems, leading to **huge financial losses** for businesses.'
lang: 'en'
keywords: 'SMS traffic pumping, SMS fraud, SMS authentication costs'
---

# What is SMS traffic pumping & how does it impact businesses?

## What is SMS Traffic Pumping?

[SMS traffic](https://www.corbado.com/blog/sms-costs) pumping is a **fraudulent scheme** where attackers
**artificially inflate SMS traffic** to generate revenue. This scam **exploits the way
SMS-based authentication works**, forcing businesses to **pay for fake SMS messages**
while fraudsters profit.

### How SMS Traffic Pumping Works

1. Attackers **trigger large volumes of SMS-based authentication requests** using bots.
2. The authentication system sends **one-time passcodes (OTPs) via SMS** to the attacker's
   controlled phone numbers.
3. These phone numbers are linked to **fraudulent telecom providers** that share revenue
   with the attackers.
4. Businesses **end up paying for every fake SMS**, leading to **massive financial
   losses**.

### How Does SMS Traffic Pumping Impact Businesses?

🚨 **Financial Losses:**

- Companies **lose millions of dollars** annually due to inflated SMS costs. In response,
  many organizations are adopting AI-driven platforms like
  [Clerk Chat SMS contact center](https://clerk.chat/industries/call-center/) to optimize
  SMS usage and lower costs.
- **Twitter (now X) lost $60 million** per year due to SMS pumping fraud.

🛑 **Security & Fraud Risks:**

- Attackers **exploit vulnerabilities** in authentication systems.
- Increased fraudulent activity **weakens trust** in
  [SMS-based authentication](https://www.corbado.com/faq/sms-based-authentication-explained).

⚠️ **Operational Burden:**

- Businesses must **detect and block fraudulent traffic**, adding **complexity and
  costs**.
- **Genuine users experience delays** due to spam-filtered OTPs.

📉 **Poor User Experience:**

- **Legitimate users may not receive OTPs** due to overloaded networks.
- **Authentication failures lead to login frustrations**, increasing **drop-off rates**.

### How to Prevent SMS Traffic Pumping?

🔹 **Rate Limiting & Geo-Blocking:** Restrict SMS requests per user and block suspicious
regions.\
🔹 **Fraud Detection Tools:** Monitor authentication traffic for unusual patterns.\
🔹 **Switch to Passkeys:** **Passkeys eliminate SMS-based authentication** altogether,
**removing the attack vector** and **reducing authentication costs by up to 90%**.

### Why Passkeys Are the Best Solution

Unlike SMS OTPs, **passkeys use cryptographic authentication**, making them:\
✅ **Phishing-resistant**\
✅ **Cost-effective**\
✅ **Immune to SMS fraud & pumping attacks**

For businesses seeking **stronger security and cost savings**, passkeys offer a
**future-proof authentication solution**.

## Read the full article