Fraud prevention with SMS verification

Fraud prevention with SMS verification

E-commerce sites use SMS verification to prevent fraudsters from trying to create multiple accounts for making purchases with stolen credit cards. Such a verification step is part of the two-factor authentication process. Two-factor authentication (2FA) is a security system that requires two separate, distinct forms of identification in order to access something. The first factor is a password and the second is usually an SMS with a code sent to your mobile phone.

Why use SMS verification?

You might be wondering why use SMS verification? Hackers have devised numerous ways to target famous websites and steal important data hold in their databases. Data such as customer personal info and payment card information are highly valuable and sought after on the dark web. Hence, your password might not be as secure as you once thought.

Data breaches are common nowadays. This is particularly true if you tend to reuse your password on multiple websites. For an example, when you use the same password, a hacker who gains access to one account will be able to get into all your other websites by using the same password as well if those websites are facing the data breach issue.

So, see the problem now?

SMS verification requires a mobile phone number, so this makes it personally identifiable. Therefore, fraudsters are discouraged from trying their luck on websites that employ SMS verification.

The pros & cons of using SMS verification


  • Most people have a mobile phone so SMS verification is easy to implement.
  • It does not require mobile data or Wi-Fi.
  • No need to install any apps for it to function.


  • Every SMS sent incurs a small cost.
  • SMS can be intercepted if user’s SIM card is cloned.
  • Bad mobile reception can delay SMS delivery to the user.

Prevent fraud, prevent chargebacks

Online stores are able to use SMS verification to screen users before allowing them to register for an account to prevent scammers. If you can stop fraudster before they even start, that’s the best option.

Shopping carts can implement this verification step to ensure only real customers are making purchases. Even kids trying to impersonate their parents won’t get through without access to their parent’s phone.

On the other hand, online merchants can easily distinguish real customers from fraudster making multiple accounts with various email addresses. By making SMS verification an integral part of your web store shopping cart, chargebacks will be reduced as fraudsters are stopped from making purchases with stolen credit cards.


The FraudLabs Pro SMS Verification plugins are a great way to easily integrate SMS verification into shopping carts. With a wide selection of ready-made fraud prevention plugins for most major e-commerce shopping platforms, it is very easy to get started. Using the FraudLabs Pro SMS Verification can help reduce the number of chargebacks by preventing fraudsters from signing up.

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