The thin veil of phone number verification in modern apps

Many digital services today—from messaging apps like Viber, WhatsApp, and Telegram to social media platforms and financial services—require users to verify their accounts with a phone number. This practice is nearly ubiquitous, with companies often justifying it as a crucial security measure. But when examining this requirement more critically, a different picture emerges: one where data collection advantages for companies often outweigh the actual security benefits provided to users.

This article examines the limited security benefits of phone verification and explores how this requirement predominantly serves corporate data collection interests. We'll analyse both the technical and business aspects of this common practice, providing developers and privacy-conscious users with a deeper understanding of what's really happening behind that innocent-looking "Enter your phone number" prompt.

The purported security benefits

Companies frequently cite several security benefits when defending mandatory phone number verification:

Account recovery. Phone numbers provide an alternative way to regain access to locked accounts. If you forget your password, many services offer SMS-based recovery options.

Two-factor authentication. Phone numbers can serve as a second authentication factor, ostensibly making it harder for attackers to compromise accounts even with stolen passwords.

Spam and bot prevention. The resource constraint of requiring a unique phone number theoretically creates a barrier to mass account creation, helping mitigate spam and bot activities.

Identity verification. Companies argue that linking accounts to phone numbers ensures users are "real people" with verifiable identities.

These justifications sound reasonable on the surface. However, when examined more carefully, their effectiveness proves considerably more limited than companies usually suggest.

The security reality: a thin veneer

Anonymous acquisition undermines identity verification

The foundation of phone-based verification—that it confirms a user's real identity—crumbles when we consider how phone numbers are actually acquired in practice. In many countries around the world, including numerous European nations, parts of Asia, and the Americas, prepaid SIM cards can be purchased anonymously with cash. No identification is required.

As one skeptical user aptly noted: "What security benefits are there when it is possible to purchase a SIM card without an ID? I could be anybody."

This reality fundamentally undermines the identity verification argument. If a malicious actor can obtain multiple anonymous phone numbers with minimal effort, how effective is phone verification at establishing authentic identities?

Technical vulnerabilities in phone-based security

Beyond anonymous acquisition, phone numbers present several technical weaknesses when used for security:

SIM swapping attacks. Attackers can social engineer their way through mobile carrier customer service to take control of a victim's phone number. This vulnerability has been exploited in numerous high-profile cases, including cryptocurrency theft and account takeovers.

# Example of how simple it is to implement SMS-based 2FA
# Note the inherent weaknesses compared to proper TOTP
def verify_user_sms(phone_number):
    verification_code = generate_random_code()
    send_sms(phone_number, f"Your verification code is: {verification_code}")
    return verification_code

# This can be defeated through SIM swapping or SS7 network vulnerabilities

SS7 network vulnerabilities. The underlying telecommunications protocol (SS7) used for SMS delivery contains known vulnerabilities that sophisticated attackers can exploit to intercept SMS messages, including verification codes.

Number recycling. Phone numbers get reassigned after periods of inactivity. A new customer might receive a number previously used for various services by someone else, creating security and privacy issues for both parties.

Virtual number services. Despite attempts to block them, services offering temporary virtual phone numbers remain available, providing ways to circumvent the intended security benefits.

When viewed through this lens, phone number verification is starting to look more like security theater than robust protection—a measure that creates the appearance of security while providing limited actual defense against determined adversaries.

The data collection reality

While security benefits of phone verification are questionable, the data collection advantages for companies are substantial and concrete:

Persistent unique identifier

Phone numbers offer several characteristics that make them particularly valuable for tracking and profiling:

Persistence. Most people keep the same phone number for years, making it an extremely stable identifier compared to cookies, IP addresses, or even email addresses.

Uniqueness. Phone numbers are globally unique and standardised, providing an excellent primary key for user databases.

Difficulty to change. Changing your phone number requires significant effort and comes with social costs, as you must update contacts and connected services. This friction benefits companies by ensuring identifier stability.

Cross-device tracking. Phone numbers enable companies to track users across multiple devices and platforms, creating comprehensive user profiles that span the digital ecosystem.

Rich metadata access

Phone numbers provide much more than just a string of digits:

Geographic information. Country and area codes reveal user location data, which can be used for geotargeting.

Carrier information. Phone numbers disclose which telecommunications provider you use, potentially revealing socioeconomic information.

Social graph mapping. For messaging apps particularly, access to phone numbers enables contact synchronisation, revealing your entire social network.

# Simplified example of how companies can extract metadata from phone numbers
def extract_phone_metadata(phone_number):
    country_code = phone_number[:phone_number.find(' ')]
    carrier_code = identify_carrier(phone_number)
    region = map_to_geographic_region(phone_number)

    return {
        "country": country_code,
        "carrier": carrier_code,
        "region": region,
        "user_id": hash_phone_number(phone_number)
    }

Enhanced profile building and monetisation

The real business value emerges when phone numbers are combined with other data points:

Identity resolution. Phone numbers help companies link disparate datasets, connecting your activities across services even when you use different usernames or emails.

Advertising targeting. Phone numbers serve as a bridge to connect online and offline purchasing activity, creating more valuable advertising profiles.

Data marketplace participation. While often not explicitly disclosed, user data including phone-derived information may be shared with partners, affiliates, or data marketplaces.

Future-proofing data collection. As cookie-based tracking faces increasing regulatory and technical restrictions, phone numbers provide companies with a fallback identification mechanism.

The economics of verification requirements

To fully understand why companies push for phone verification despite its limited security value, we must examine the underlying economic incentives:

Network effect acceleration. For messaging and social apps, phone verification enables automatic contact discovery, dramatically accelerating network growth and user acquisition—something that most tech companies value highly.

Reduced user anonymity. Anonymous users generate less valuable data. Phone verification helps ensure that companies can build more complete profiles.

Higher retention. Users who have verified with phone numbers have higher switching costs, reducing churn and increasing lifetime value.

Improved monetisation opportunities. More accurate user profiles lead to higher advertising rates and improved conversion metrics.

Alternative approaches to security

If security were truly the primary concern, companies could employ more effective alternatives:

TOTP-based authentication. Time-based One-Time Password authentication (like Google Authenticator) provides stronger security without requiring phone numbers.

FIDO2/WebAuthn. Modern authentication standards using public key cryptography offer significantly better security with privacy preservation.

Hashed verification. For preventing spam, services could implement Proof of Work systems or privacy-preserving verification mechanisms.

# A more secure alternative using WebAuthn/FIDO2
from flask import Flask, request, jsonify
from webauthn import (
    generate_registration_options,
    verify_registration_response,
    generate_authentication_options,
    verify_authentication_response
)

app = Flask(__name__)

@app.route('/register/begin', methods=['POST'])
def register_begin():
    options = generate_registration_options(
        rp_id="example.com",
        user_id="user123",
        user_name="username@example.com"
    )
    # Store challenge in session
    return jsonify(options)

@app.route('/register/complete', methods=['POST'])
def register_complete():
    # Verify registration without requiring phone number
    verification = verify_registration_response(
        credential=request.json,
        expected_challenge="stored_challenge",
        expected_origin="https://example.com"
    )
    # Store credential for future authentications
    return jsonify({"verified": True})

The regulatory landscape

Privacy regulations like GDPR in Europe and CCPA in California have begun to address excessive data collection, but phone number requirements often persist because companies can argue they serve a legitimate security purpose. This highlights the need for both stronger regulatory frameworks and greater technical literacy among users and policymakers.

Recommendations for developers and users

For developers:

• Implement alternative authentication methods that don't require phone numbers when possible
• Follow data minimisation principles by only collecting what's absolutely necessary
• Be transparent about how phone numbers will be used
• Consider privacy-preserving alternatives like ephemeral identifiers or zero-knowledge proofs

For users:

• Use dedicated services for different aspects of your digital life
• Consider privacy-focused alternatives to mainstream apps where possible
• Be aware of verification requirements before signing up for new services
• Use virtual phone numbers (where allowed and appropriate) for less critical services

Conclusion

The widespread practice of requiring phone number verification presents a classic case of misaligned incentives between companies and users. While framed as a security measure, phone verification's most substantial benefits flow to the companies implementing it, primarily through enhanced data collection and user profiling capabilities.

The security benefits, though real, are significantly more limited than typically portrayed and come with serious privacy trade-offs that users often don't fully understand. By recognising this dynamic, developers can make more ethical choices in application design, and users can make more informed decisions about which services deserve access to their personal information.

The next time a service asks for your phone number "for security reasons," the appropriate response might well be a healthy dose of skepticism.