How should an annual SMS verification budget be calculated?
Annual SMS verification cost is the billable message volume multiplied by the supplier's current package and destination rate, with redundancy and abuse-control cost added. Daily active users are not message volume. For international delivery, calculate each destination separately instead of assuming one global rate.
A user may stay signed in for months or require codes for a new device, account recovery, phone-number change, and a high-risk transaction. Resends, automated abuse, and message length also affect billing. Use recent logs covering normal operation and known peaks to measure billable messages per successful verification. For a new product, model registration, sign-in, recovery, and risk checks separately.
When defining budget, scope, and cost assumptions, also compare How should a large language model API budget be estimated? and How is the App Store commission calculated, and which costs does it affect?; the linked guidance adds context that should be considered in the same decision.
Keep supplier examples dated and replaceable
As of August 25, 2026, Tencent Cloud's official mainland China SMS pricing lists prepaid packages without separating verification, notification, and marketing messages: CNY 470 for 10,000, CNY 4,500 for 100,000, and CNY 43,000 for 1,000,000. Those correspond to nominal rates of CNY 0.047, 0.045, and 0.043 per message. Package validity, eligibility, message type, and refund rules can change what the client actually pays.
| Expected billable messages | Example package | Nominal rate | Also verify |
|---|---|---|---|
| 10,000 | CNY 470 | CNY 0.047 | Validity and whether failures consume credit |
| 100,000 | CNY 4,500 | CNY 0.045 | Monthly peak, template review, balance alerts |
| 1,000,000 | CNY 43,000 | CNY 0.043 | Abuse protection, fallback route, commitment risk |
This is a dated example of one public supplier, not a market price, and it excludes integration, monitoring, fallback service, and tax differences. International and Hong Kong/Macao/Taiwan pricing varies by destination—sometimes substantially within one supplier. Use Σ(destination volume × current destination rate) and confirm sender identity, template, local registration, and delivery restrictions.
Derive demand from verification events
For registration, record new accounts, requests, success, and resend; verified federation or passkeys may reduce SMS but anti-registration controls remain. For routine sign-in, count new-device and risky sessions rather than all active users; retain session revocation and device detection. Recovery and phone changes need current and new credential evidence or manual review, not merely a code to the new number. Sensitive transactions should use risk-tiered verification with audit.
For example, 80,000 annual events at a measured 1.18 billable messages per successful verification produce a 94,400-message baseline. The factor must come from this product's logs. Without evidence, model several values—such as 1.0, 1.2, and 1.5—alongside seasonal peaks, repricing, and abnormal traffic.
Frontend countdown is not a security boundary. Enforce limits by phone, account, IP, device, and scenario on the server; alert on failures, guessing, number-range patterns, and sudden growth. Codes should be short-lived and single-use and never appear in plaintext logs. Supplier thresholds are a secondary control.
OWASP's Authentication Cheat Sheet recommends throttling login attempts. NIST SP 800-63B-4 treats public telephone-network out-of-band authentication as restricted, so high-value accounts should not depend on SMS as their sole strong factor. In China, signatures, templates, records, consent, and opt-out for commercial messages must also follow the Ministry's short-message service rules; a verification route is not a marketing route.
Wavesteam has the client own the messaging account, instruments usage, delivery, verification success, and abuse, and then selects a package from observed demand. A slightly cheaper route with weak delivery or unstable review is not recommended as the sole production channel.