Two-Factor Authentication: Tailor-Made for SMS
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1 SAP Thought Leadership Paper SAP Mobile Services Two-Factor Authentication: Tailor-Made for SMS Exploring Myths, Misconceptions, and Best Practices for SMS-Based 2FA
2 Table of Contents 4 Understanding Two-Factor Authentication 4 Two-Factor Authentication via SMS 5 Requirements for Reliable Delivery 7 Summary: Getting the Best Delivery of 2FA Messages 7 Learn More About the Author William Dudley is group director and mobile evangelist in Global Strategy & Solutions at SAP and has almost 30 years of experience building and managing telecommunications network infrastructure. For SAP Mobile Services, a division of SAP, he defines global strategy and solutions within the mobile ecosystem, focusing on solutions for messaging, next-generation networks such as Long-Term Evolution (LTE) and IP Exchange (IPX), and mobile consumer engagement. As a mobile evangelist, he communicates through both internal and external publications and is active in industry groups. 2 / 7
3 Two-factor authentication (2FA) is now a common means of increasing account security used by social networks, mobile commerce solutions, and financial institutions, among others. Short message service (SMS) is fast becoming an accepted solution for 2FA. However, to be effective, 2FA over SMS has stringent service requirements, putting greater demands on messaging providers to ensure timely delivery while also maintaining service integrity. This paper will explore myths, misconceptions, and best practices for SMS-based 2FA. 3 / 7
4 Understanding Two-Factor Authentication Two-factor authentication, also called multifactor authentication (MFA), is a scheme that requires at least two authentication factors, including: A knowledge factor (something only the user knows, such as a password or PIN) A possession factor (something only the user possesses, such as an ATM card, mobile device, or smart card) An inheritance factor (some feature inherent in the user, such as a fingerprint or retina pattern) 2FA has been in common use for many years in situations in which the user must be accurately identified. ATM usage is a good illustration. The user presents an ATM card to the machine (something the user possesses) and then enters a secret PIN (something the user knows). Without both of these authentication factors working, the user cannot withdraw cash from the account. Another example of 2FA use is immigration control with biometrics. The traveler has a passport (something only he or she possesses), as well as a unique fingerprint to match to the passport. The widest use of 2FA in the mobile space is for one-time passwords (OTPs). OTPs are typically sent via SMS to the mobile device. Alternately, the OTP can be sent to an address on file. This is used as an additional authentication step utilizing a random string of digits (for example, a PIN), as well as a means to change passwords or retrieve or reset lost passwords. The goal of 2FA, especially within the online and mobile space, is to reduce instances of online fraud involving monetary or identity theft. While there are variations in the manner in which an individual can be authenticated, the strength of 2FA lies in its implementation that is, the strength of the two factors that are used to identify the individual. When 2FA is deployed in a mobile ecosystem, there must be a variety of safeguards in place to allow the implementation to function securely. At the most basic level, a 2FA implementation should ensure a high degree of likelihood that the message containing the token will arrive to the mobile devices. Unfortunately, some implementations do not meet this fundamental requirement. TWO-FACTOR AUTHENTICATION VIA SMS One of the most popular means to deliver OTPs or 2FA authentication tokens (PINs, alphanumeric codes, and so on) is to send them to a registered mobile device (something the user has). In the last two or three years, many social networks, online shopping behemoths, and financial institutions have begun to use 2FA as the standard method for resetting passwords, authorizing users, and validating transactions. Delivery of these 2FA tokens over SMS is typically reliable and quick, and it uses a medium that virtually every mobile device can support. 4 / 7
5 Delivery of the OTP via SMS is simple and reliable because SMS is ubiquitous across mobile devices, and no special tokens or cryptographic keys need to be shared between the mobile device and the server. There are alternatives to 2FA via SMS such as the Google Authenticator app, but this relies on smart devices, which are not necessarily available in many regions. REQUIREMENTS FOR RELIABLE DELIVERY Delivery of a 2FA message through SMS requires a reliable and quick delivery channel. This means that the pathway to the destination mobile operator should be as direct as possible via approved routes. Most operators today require that senders of application-to-person (A2P) type traffic (of which 2FA and OTPs are clear examples) use approved routes either through a direct IP connection (typically via Short Message Peer-to-Peer [SMPP] protocol) or through the use of approved sending of global titles for Signaling System 7 (SS7) delivery. The originating address of the 2FA message should be either a short code, if this is supported or required by the destination country, or a long code (standard International Telecommunication Union [ITU] E.164 telephone number). Short Codes and Long Codes Sending 2FA messages to subscribers across the world presents some complex situations: Some countries require short codes only. Because short codes do not cross national boundaries, for each country that requires a short code, an enterprise s short codes should be acquired and connected to each of the mobile network operators (MNOs) and to the mobile virtual network operators, or MVNOs, if available. For MNOs in countries that do accept long codes, acceptance may depend on whether the long code is local that is, with the national country code or has a different country code. For MNOs in countries that support long codes using different country codes, the route that the message traffic takes to connect to the MNOs may be a factor. MULTIFACTOR AUTHENTICATION AND THE HEARTBLEED OPENSSL BUG It should be noted that 2FA for OTPs was identified as an effective way to combat the recent Heartbleed OpenSSL bug that was very much in the news in early The threat was caused by recent versions of OpenSSL that had a buffer overflow vulnerability that enabled the heartbeat function to be tricked into responding with up to 64 KB of data. This gave hackers 64 KB snapshots of data from memory on the server side of the connection that could potentially contain user IDs and passwords from previous login attempts (hence the name Heartbleed). Accounts at institutions using 2FA solutions with OTPs were not in jeopardy from Heartbleed because the OTP is not stored but freshly generated every time and, thus, is not accessible to the hackers. 5 / 7
6 Short Code Countries In many countries, including the United States, long code A2P traffic is not acceptable. U.S. MNOs scrutinize and approve each short code and its campaigns. Short codes used by enterprises for 2FA and OTPs are commonly approved, and they provide reliably high delivery rates. In the last few years and with growing frequency starting in 2013, organizations have been attempting to deliver 2FA, PIN codes, and OTPs among related applications via long codes utilizing the national person-to-person (P2P) network. These are not approved routes and are often blocked as spam by interoperator hub providers as well as MNOs using various antispam filters. Utilization of long codes in countries that support only short code for A2P traffic is not without controversy. Some aggregators have tried to define 2FA and OTP traffic as P2P, because the traffic was initiated by the subscriber; however, this scenario is strongly held to be a classic A2P use case by MNOs and aggregators. The reality is that 2FA-type messages cannot be replied to, thus eliminating the concept of using two-way P2P in these national messaging ecosystems. Long Code Countries Long codes are acceptable for 2FA and OTPs in countries where they are approved for A2P routes. In these cases, the A2P traffic flows over approved routes (via accepted global titles in the SS7 network) to reach MNO subscribers. For many multinational enterprises, long codes provide an efficient manner to reach subscribers in numerous countries. A2P messaging aggregators with a strong global reach can provide information regarding the rates that each MNO charges as well as information regarding local regulations. The A2P messaging aggregators can, many times, pay wholesale rates to the MNOs and can therefore resell that access as well as apply all appropriate mobile number portability solutions, to ensure the message is delivered to the correct MNO for the subscriber. The use of approved A2P routes to reach MNOs is paramount for the quick and reliable delivery of 2FA and OTP tokens to subscribers. Understandably, most of these expire after a short period of time (the majority in 5 minutes or less). Consequently, it s essential for the message to be delivered quickly from the enterprise servers to the subscriber. In July 2014 the French online newspaper The Connexion revealed that 2FA codes sent via SMS to mobile phones in France contributed to a second consecutive annual drop in Internet fraud. Source: Simple SMS code cuts online fraud, The Connexion, July 16, 2014, 6 / 7
7 Unfortunately, some A2P aggregators who purport to provide global MNO connectivity will hand off the messages to intermediaries, who hand them off to still other intermediaries, who may refile the message to be delivered via SIM farms. SIM farms use subscriber identity modules (SIMs) to provide their services. They usually deploy hundreds, if not thousands, of SIM cards in automated messaging gateways. Incoming messages are resent, many times changing the originating number, into the global P2P SMS network. Messages are then sent back into the SS7 network or through messaging hubs to be delivered to the end subscriber. These messages are highly likely to be blocked as spam or as unapproved A2P traffic over P2P delivery routes. Consequently, enterprises that focus on low-cost messaging aggregators may find that very few of their 2FA and OTP messages actually reach the end subscriber. SUMMARY: GETTING THE BEST DELIVERY OF 2FA MESSAGES 2FA and related messages should always use the highest-quality routes available from well-known, high-quality messaging aggregators. As we ve shown, there is plenty of misinformation about the methods that should be used to deliver 2FA messages, which can result in ill-informed choices. The key point is that these messages should be delivered quickly and accurately, using approved messaging routes. Trying to cut costs by using low-quality routes or cut-rate aggregators will often end up costing more in customer frustration and the resulting lost revenues. LEARN MORE The SAP Mobile Services organization is a global, reliable messaging aggregator using SAP SMS 365, enterprise service, as our messaging hub. SAP SMS 365 provides: The ability to reach over 900 mobile networks through a single, standard interface Accurate and fast message routing, using our advanced number resolution system to correctly identify the destination MNO High-priority delivery solutions that help to ensure fast delivery of 2FA and OTP messages Highest-quality approved routes for the delivery of all messaging, including 2FA and OTP messages Continuous route testing to help ensure that all routes used for time-sensitive messaging are operational and available To discover more, please go to 7 / 7
8 No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP SE or an SAP affiliate company. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other countries. Please see for additional trademark information and notices. Some software products marketed by SAP SE and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP SE or an SAP affiliate company for informational purposes only, without representation or warranty of any kind, and SAP SE or its affiliated companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP SE or SAP affiliate company products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation, and SAP SE s or its affiliated companies strategy and possible future developments, products, and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions. Studio SAP 33043enUS (14/09)
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