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How Secure RCS Messaging Could Replace SMS OTPs for Transaction Confirmations

ccrypts

2026-01-25

11 min read

Assess migrating SMS OTPs to cross-platform E2EE RCS: benefits, hurdles, and a step-by-step migration roadmap for exchanges and wallets in 2026.

Hook: Stop losing funds to weak OTPs — a clearer, safer path exists

If you run an exchange, wallet or custodial service you live with three persistent risks: account takeovers via SIM swaps and SS7 attacks, rising credential stuffing and password-reset exploits, and the friction of poor multi-factor UX that drives users to risky shortcuts. In 2026 a technical inflection point is here: cross-platform, end-to-end encrypted RCS messaging is finally becoming viable. That creates a practical, security-first alternative to SMS-based OTPs and transaction confirmations — but only if teams plan migration correctly.

Why SMS OTPs keep failing in 2026

SMS-based one-time passwords (OTPs) have long been convenient. But their security model depends on telco signaling and the assumption that the SIM and carrier network are the authority for message delivery — an assumption repeatedly violated in real attacks. In early 2026 the industry still sees:

SIM swap and port-out attacks — attackers social-engineer carriers or use leaked PII to move a user's number to an attacker-controlled SIM.
SS7 and signaling vulnerabilities — attackers exploit legacy telephony routing to intercept SMS or voice OTPs.
Carrier and SMPP gateway compromises — infrastructure-level interceptions or misrouting that bypass protections.
Phishing and account-recovery abuse — SMS OTPs are predictable targets for credential-reset chains.
Regulatory & audit friction — SMS metadata and content are often routed through third countries, complicating compliance.

High-profile reports and continuing attack waves (see January 2026 analysis on account takeover surges) keep pressure on security teams to move beyond SMS for high-value flows such as transaction confirmations and withdrawal approvals.

The 2025–2026 change: Cross-platform E2EE RCS becomes real

RCS (Rich Communication Services) was once a carrier-level “iMessage for Android” answer — but fragmentation and lack of cross-platform E2EE limited its security value. That changed with universal profile updates and messaging security work in late 2024–2025 and early 2026. Key developments include:

GSMA Universal Profile 3.0 and adoption of MLS-based encryption models for inter‑carrier E2EE.
Major platform vendors adding MLS/E2EE capabilities; Apple’s iOS betas in late-2025/early-2026 include code suggesting support for end-to-end encrypted RCS conversations across iPhone and Android.
Growing carrier support outside the U.S. for toggling carrier-managed RCS encryption.

These changes mean RCS can now provide the E2EE guarantees necessary for replacing SMS in high-risk flows — but practical migration still requires careful design.

Why migrate OTPs and transaction confirmations to RCS?

Moving sensitive confirmations from SMS to RCS encryption offers concrete, measurable benefits:

Stronger network-level confidentiality — MLS-based E2EE protects message contents against carrier, gateway and signaling interception that plagues SMS.
Reduced SIM-swap impact — while SIM compromise still risks impersonation at the phone level, E2EE tied to device keys and session state makes silent re-direction of OTPs into an attacker’s hands significantly harder.
Richer UX for secure confirmations — native buttons, formatted transaction details, deep links, and cryptographic attestation (signed transaction hash) reduce user error vs copying codes from SMS.
Lower friction and higher conversion — one-tap approve flows and clear contextual details increase approval rates and reduce support tickets.
Better telemetry — structured delivery receipts (read/delivered) and message receipts improve fraud detection and analytics.

Adoption hurdles exchanges and wallets must plan for

RCS adoption is not automatic. Key obstacles you must mitigate:

Device & carrier fragmentation: not all users will have RCS with E2EE enabled; Apple’s rollouts are progressive and some U.S. carriers lag behind global peers.
Fallback complexity: a safe, auditable fallback (in-app push, authenticated web session, or SMS as last resort) is required to avoid lockouts.
Operational dependency: your service now depends on carrier gateways and vendor SDKs — SLA, monitoring and threat models must expand accordingly.
Privacy & data retention: some compliance regimes require retaining confirmation evidence — you must decide what to log without breaking E2EE guarantees. Consider edge storage and privacy-friendly analytics where appropriate.
User trust & education: users must recognize and trust RCS confirmations; poor UX invites social-engineering attacks that mimic RCS content.

Risk model: what RCS protects against — and what it doesn’t

Before migrating, define a detailed threat model. In short:

RCS E2EE mitigates: network interception, carrier gateway compromise, SS7 message interception.
RCS does not automatically mitigate: endpoint compromise (malware on the device), social-engineering that convinces users to approve transactions, and account recovery flows that bypass messaging entirely.

Design principle: treat RCS as a stronger channel, not a silver bullet. Combine it with attestation, device binding and secondary confirmations for critical flows.

Implementation steps for exchanges and wallets — an actionable roadmap

The following guide is a tested, pragmatic migration plan suitable for security, product and engineering teams.

Phase 0 — Strategy & risk assessment

Map high-value flows: withdrawals, high-value trades, key rotations, KYC changes and password resets.
Quantify risk: historical compromise vectors, SMS interception incidents, help-desk volume and fraud losses.
Define success metrics: reduction in SMS-OTP-based takeovers, confirmation conversion rates, latency and support volume.

Phase 1 — Proof-of-concept & vendor selection

Select RCS gateway partners and SDKs that support MLS/E2EE and cross-carrier interop; ensure they publish security audits and compliance attestations.
Build a sandboxed pilot targeting power-users in multiple jurisdictions (where RCS E2EE is available) and instrument telemetry.
Design secure server-side APIs: messages should be ephemeral, include transaction hashes, nonces and expiry timestamps; never embed raw sensitive keys.

Phase 2 — Secure architecture & cryptography

Key technical considerations:

Message semantics: send a structured approval request that includes transaction amount, recipient address, time, and a short transaction hash. Avoid long raw hex values; include a deep link that opens the wallet and verifies the same hash locally.
Signing and attestation: sign the message payload server-side (HMAC or asymmetrical signature) and include a signature that the client can verify against a published server public key. For highest assurance, include a signed transaction digest increasing non-repudiation.
Session binding: bind RCS session identifiers to registered device keys using device attestation (Android SafetyNet/Play Integrity, Apple DeviceCheck/Attestation) to prevent session hijacking.
Replay protection: use unique nonces and short TTLs; store verification hashes server-side to guard against replays.
Fallback cryptography: ensure fallback flows (push or SMS) preserve integrity by forcing additional verification steps and manual review for high-value transactions.

Phase 3 — UX, anti-phishing and trust signals

User experience is central. Recommendations:

Clear, consistent transaction details: display minimally required information, use human-friendly identifiers and an explicit “verify on device” call-to-action.
One-tap approve with confirmation modal: require a final in-app confirmation when a user taps an RCS approve button — the deep link should verify the transaction hash prior to submission.
Verified sender metadata: negotiate with RCS gateway to display verified business name, logo and cryptographic attestation where possible; educate users to look for these trust signals.
Phishing countermeasures: do not ask users to reply with codes; never include links that accept input without in-app verification; include a “Report suspicious message” shortcut triggered to your fraud team.

Phase 4 — Compliance, logging and forensics

Regulators and auditors will ask for proof of confirmation. Options:

Log cryptographic proof (message signature, transaction hash, delivery and read receipts) server-side. Store only metadata and signatures — not message plaintext — to respect E2EE.
Implement tamper-evident logging (e.g., append-only logs with chained hashes) to support audits without breaking E2EE semantics.
Define retention windows aligned with AML/KYC obligations and local privacy laws; seek legal counsel where E2EE conflicts with mandated data access.

Phase 5 — Rollout, monitoring and KPIs

Rollout plans should be incremental and measurable:

Start opt-in pilots in countries/carriers where RCS E2EE is available; expand to mandatory for high-risk flows once stability proven.
Measure: delivery latency, approval completion rate, reduction in OTP-related takeovers, help-desk volume and fraud losses.
Maintain a robust fallback strategy and monitor fallback rates as a signal of RCS coverage gaps.

iOS–Android parity and the carrier landscape in 2026

As of early 2026, Apple’s betas indicate serious movement toward MLS-based RCS encryption on iPhone — but deployment timelines vary by carrier and region. Several points to consider:

Region matters: many non-U.S. carriers have enabled new RCS encryption settings earlier than major U.S. operators. Pilot selection should reflect carrier readiness per market.
Graceful degradation: design flows to detect whether the recipient’s client supports E2EE and fall back or prompt for an alternate channel if not.
Vendor compatibility: test across handset OEMs and OS versions. MLS interoperability tests between Apple and Android implementations will be key in 2026.

Threat-model analysis — a closer look

Consider three attacker archetypes and how RCS changes the outcome:

Network interceptor: previously could intercept SMS through SS7 or compromised gateways. With RCS E2EE, the message payload is unreadable unless the endpoint device is compromised.
SIM swap operator: moves the number to an attacker SIM. RCS reduces risk if the platform binds approval messages to device keys and requires an in-app transaction verification step tied to private keys — the attacker with just the SIM cannot replicate the device key.
Phisher: can still social-engineer users into approving transactions; mitigate with clear UX, education and secondary confirmations for high-value actions.

Preventing interception is necessary but not sufficient. Secure confirmations require cryptographic binding between the message and the transaction, device attestation, and a user experience that minimizes human error.

Advanced strategies and future roadmap (2026+)

Look beyond basic confirmation flows — RCS opens new possibilities:

Verifiable confirmations: combine RCS messages with verifiable credentials or DIDs so confirmations carry machine-verifiable attestations of origin that are stored as signed proofs.
Attested device confirmations: use OS-level attestation to prove the client verified a signed transaction hash before approving, increasing non-repudiation for disputes.
Multi-channel cryptographic cross-checks: for ultra-high-value transactions, require an RCS confirmation and a WebAuthn signature, or an RCS sign + in-app biometric verification.
Decentralized recovery: integrate RCS confirmations into custody models that support social recovery or multi-sig confirmations where RCS reduces some but not all attack vectors.

Practical engineering checklist (condensed)

Inventory high-risk flows that use SMS today and classify by impact.
Choose RCS gateway(s) with MLS/E2EE support and published security documentation.
Design message payloads: transaction id, short hash, nonces, TTL, signature and deep links.
Implement device attestation and session binding for each registered device.
Build fallback flows: prioritize in-app push then SMS as last resort for low-value ops.
Log cryptographic metadata (signatures, hashes, receipts) in tamper-evident logs for audits.
Monitor deliverability, fallback rates, fraud metrics and user support volume closely.
Educate users: visible trust indicators, “how to spot a scam” flows and quick reporting channels.

Case study (pilot scenario)

Hypothetical pilot: a European crypto exchange ran a 6-month pilot in 2025–26 in two markets with high carrier RCS E2EE coverage. They implemented RCS confirmations for withdrawals over a EUR 2,000 threshold and bound each confirmation to a signed transaction hash verified by the wallet app. Results after three months:

OTP-based account takeovers for pilot users dropped by ~60%.
Approval completion rate increased 12% vs SMS (users preferred one-tap flows).
Fallback to SMS decreased over time, indicating growing RCS coverage.

Key lessons: deep-link verification is essential, and staff must be trained to treat RCS-sourced evidence as cryptographic proof supported by logs during disputes.

Final security checklist before flip

Complete a full threat model and compliance review.
Confirm vendor auditing, SLA and incident response plans with carrier gateways.
Instrument end-to-end telemetry and tamper-evident logs for audits.
Design fallback flows and test account recovery paths intensively to avoid lockouts.
Run user education campaigns and enable an easy “report suspicious” action inside messages.

Actionable takeaways

Start small, measure fast: pilot RCS confirmations for a subset of high-value flows in markets with proven E2EE support.
Cryptographically bind approvals: include signed transaction hashes and nonces, and verify them client-side before execution.
Use device attestation: bind sessions to device keys so SIM or number changes alone cannot approve actions.
Keep strong fallbacks: maintain in-app checks and escalate to manual review for any fallback to SMS.
Log proof, not plaintext: preserve signatures and receipts for audits while respecting E2EE privacy.

Call to action

If you operate an exchange, wallet or custodial service, the time to act is now. RCS E2EE is maturing fast in 2026 and can close a major SMS vulnerability window while improving UX. Start by running a controlled pilot in markets with carrier support, adopt cryptographic binding for every confirmation, and instrument your fraud telemetry to show the impact.

Contact our secure-messaging migration team for a tailored migration checklist, carrier readiness map and implementation blueprint that includes threat modeling, cryptographic design and compliance templates.

crypts

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Senior editor and content strategist. Writing about technology, design, and the future of digital media. Follow along for deep dives into the industry's moving parts.