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This article was published on March 9, 2021

Here’s why you’re not receiving OTPs in India right now (Updated)

Here’s why you’re not receiving OTPs in India right now (Updated)
Update (10/03/2021 10AM IST): The Telecom Regulatory Authority of India (TRAI) has paused the rollout of this blockchain-based SMS scrubber for now. That means you can expect to get your OTPs in India with a lower failure rate. 
If you’re making an online payment in India using a card or via net banking, you have to go through a two-factor authentication process. The 2FA is usually in form of a One Time Password (OTP), delivered through a text message.

However, many Indians are facing troubles with payments since yesterday as their OTPs are not getting delivered. This is disrupting many online and offline businesses who rely on digital payments.

The reason is India’s new SMS verification system. Telecom operators have started rolling out a blockchain-based Distributed Ledger Technology (DLT) that forces telemarketers to register, and avoid being identified as spam — and therefore blocked.. After registration, marketers have to compose and distribute messages that comply with pre-approved templates.

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Telecom operators will scrub these messages to check the content, and send it only to folks who have given their consent to receive texts from select companies. You can read more about India’s new SMS system here.

According to multiple reports, this new system started rolling out yesterday, but because many banks and financial entities failed to register themselves, customers were stuck in an OTP void.

A report from the Economic Times noted that the delivery failure rate for OTPs was around 25% amongst top banks. That’s a worrying sign for both customers and banks.

Many officials from various telecom bodies told ET that operators had sent an intimation to banks and other principal institutions to register their SMS templates.

While this issue is getting resolved, banks and other financial entities should not heavily rely on SMS, and implement a fail-safe way to deliver OTPs through alternative means.

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