OTP stands for One-Time Password. It's a unique temporary code used for authentication purposes. OTPs are typically sent to a user's mobile device or email and are valid for only one login session or transaction. They enhance security by adding an extra layer of verification to ensure that the person attempting to access an account or perform a transaction is the authorized user.

OTP generated can be used for the following purposes:

1. New Registration
2. When the password is forgotten.
3. While logging in.

Whereas the admin can apply OTP validation for the above-mentioned aspect. In addition to that, it can be used during checkout.

Checkout our Mobile OTP Login and Order SMS Notifications Extension for Magento 2 to setup OTP generation for customer.