What is Two-Factor Authentication?

What is Two-Factor Authentication?
What is Two-Factor Authentication?

Two Factor Authentication has a long history, originating as early as 1984. Its significance has grown in the contemporary era due to the expanding digital landscape, where a substantial portion of our business activities now occurs.

With the rising concerns of hacking, theft, and the potential consequences of losing access, implementing 2FA has become a need of the hour.

What is Two-Factor Authentication?

Two-Factor Authentication, also known as 2FA Authentication, is a method of confirming a user's identity that necessitates the provision of an extra authentication factor, either alongside a password or instead of it.

This additional layer of security is employed when accessing websites, applications, or networks.

With 2FA Authentication, it becomes more challenging for attackers to infiltrate an individual's devices or online accounts. This is because even if the victim's password is compromised, solely possessing the password is insufficient to pass the authentication verification process.

The Importance of Two-Factor Authentication (2FA)

Many users have already experienced 2FA without necessarily realising it, such as receiving a numeric code on their phone to enter, even after entering a password, for accessing a website.

The importance of 2FA can be highlighted through the following points:

  • Two-Factor Authentication provides an additional layer of security by confirming login requests through a separate venue, ensuring that the access is legitimate.
  • 2FA plays a critical role in web security as it effectively mitigates the risks associated with compromised passwords. Even if a password is hacked, guessed, or phished, it becomes useless without approval from the second authentication factor.
  • 2FA security engages users, making them active participants in their digital safety. When users receive a 2FA notification, they are prompted to question whether they initiated the login or if someone is attempting to access their account. This instils a sense of security awareness with each transaction.
  • Unlike many other passive web security methods, Two-Factor Authentication establishes a partnership between users and administrators, creating a collaborative approach to maintaining a strong security posture.

Benefits of Two-Factor Authentication (2FA)

Advanced Security

A second form of identification reduces the likelihood of hackers gaining unauthorised access to corporate devices or sensitive information, bolstering overall security measures.

Better Productivity and Flexibility

Businesses are embracing the freedom that remote work offers to increase productivity as it becomes a more popular trend. With 2-Factor Authentication, employees can securely access corporate systems from any location or device without compromising sensitive data.

Cost Efficiency in Help Desk

Two-Factor Authentication diminishes the need for time-consuming password resets that burden help desks. Businesses can reduce help desk costs and free up resources for more productive tasks by enabling users to reset their own passwords through 2FA.

Establish Secure Online Relationships

The rise of identity theft poses a significant threat to businesses, potentially damaging trust and credibility. 2-Factor Authentication can actively combat fraud and provide a secure brand experience. This fosters strong, ongoing relationships with customers, ensuring trust and loyalty.

Advanced User Experience

Employing Two-Factor Authentication apps with varied code generation methods enhances the user experience by providing flexibility and convenience.

For day-to-day logins, users may prefer using a Time-Based One-Time-Password (TOTP) app on their smartphone while opting for a hardware token for transactions requiring higher security.

Increased Resilience

Two-Factor Authentication apps that employ diverse code generation methods offer greater resilience against attacks than those using a single method. If attackers compromise a TOTP app, they cannot compromise a hardware token that employs a different code generation approach.

Types of Two-Factor Authentication Products

Numerous methods of Two-Factor Authentication exist, but they share a common objective: offering a means to validate a login that is completely independent of the password. Regardless of the specific method employed, one thing is certain: Two-Factor Authentication is paramount, regardless of any inconvenience users may perceive.

The owner of secure systems uses various types of Two-Factor Authentication, which include the following.

Hardware Tokens

The hardware token is a tangible item that incorporates a built-in private key. It uses this key for implementing public-key cryptography when communicating over the internet.

Adding the hardware token as a new authentication factor for a particular service generates a unique identification and a pair of keys exclusively linked to that specific service.

For instance, this type of 2-Factor Authentication requires users to possess a physical token, such as a USB token, which they insert into their device before logging on. Some hardware tokens display a digital program that users must enter.

SMS and Voice 2FA

SMS-based 2FA involves direct communication with the user's phone. After entering a username and password, the website sends a unique one-time passcode (OTP) to the user via text message. The user then enters the OTP back into the software for access.

In parallel, Voice-based two-factor authentication (2FA) involves an automated phone call to the user, where a spoken code is provided. Although this approach is less commonly used, it is advantageous in regions with costly smartphones or limited cellular service.

Software Tokens for 2FA

Software tokens are popular types of 2-Factor Authentication that rely on a software-generated time-based, one-time passcode (TOTP), also known as a "soft token." Users must download and set up a free 2FA application on their smartphone or desktop.

Next, users may associate the app with websites that offer this type of authentication. During sign-in, users enter their username and password, and upon approval, they enter the code displayed on the app.

Soft tokens typically remain valid for less than a minute. Since the code is generated and displayed on the same device, they mitigate the risk of interception by hackers, unlike SMS or voice delivery methods.

Push Notifications for 2FA

This method involves downloading a push notification app on the phone. A push notification is sent to the user's smartphone when logging in to a website and entering the credentials. A message appears on the phone, prompting the user to approve the login attempt with a tap.

"Push notifications" establish a direct and secure connection between the retailer, the 2FA service, and the device, reducing the potential for phishing, man-in-the-middle attacks, or unauthorised access.

Biometric Verification for 2FA

Biometric 2FA, also known as biometric authentication, is a technique that confirms a user’s identity using a unique identifier, such as their facial traits, fingerprint, voice, iris pattern, etc.

This biometric aspect of a user serves as a reliable means for authenticating the right user to gain access to a source. Unlike password or hardware tokens, biometric characteristics are non-transferable and cannot be shared from one user to another.

2FA: How Does it Work?

The process of Two-Factor Authentication solutions can vary depending on the application or vendor.

However, let’s look at how Two-Factor Authentication generally works:

  1. The program or website requests the user to log in.
  2. The user provides their login credentials, typically their username and password. The server verifies the credentials and identifies the user.
  3. For processes that don't rely on passwords, the website generates a unique security key for the user. This key is processed by the authentication tool and validated by the server.
  4. The user is then prompted to proceed with the second stage of the login. This stage can take various forms but requires the user to demonstrate possession or inference of something unique to them. This could include biometrics, a security token, an ID card, a smartphone, or another mobile device. This serves as the factor of possession or inference.
  5. In some cases, the user may need to enter a one-time code generated during the previous step.
  6. After providing both authentication factors, the user is authenticated and granted access to the application or website.

Elements of Two-Factor Authentication

Account Creation

Incorporating 2FA during account creation serves two purposes. Firstly, it helps validate the email or phone number provided, ensuring their authenticity. Secondly, it is a deterrent against criminals creating accounts with false identities.

Additionally, you can integrate 2FA into your onboarding process. For example, sending a welcome email with a verification link is a 2FA step. This not only enhances user engagement but also enhances user safety.

Financial Transactions

In-person payments and ATM usage rely on 2FA security, where users need both a card and a PIN. Similar security measures are necessary online to combat the significant losses of card-not-present fraud.

Banks are prioritising security by offering optional 2FA to protect online accounts. Card issuers also embrace this trend by incorporating 2FA into digital payment processes. For instance, users may receive a code via text or use two-way texting to authorise a payment.

Unrecognised Device or Location

Monitoring user habits can detect suspicious activity. For example, requesting an additional step when users log in from a different device or employing 2FA security for logins from unfamiliar locations.

Analysing the time of day can also be helpful, as users rarely log in outside work hours. Any deviations from regular patterns can indicate a fraudulent login attempt, and 2FA provides protection.

Account Recovery

In cases where users forget their password, they require an account recovery feature. However, this feature can be exploited by criminals to gain unauthorised access to an account.

A common tactic is gaining control of an email address and using password reset links to access additional accounts. Implementing 2FA during the account recovery process enables genuine users to regain access while securely preventing unauthorised access by criminals.

Sensitive Data

Adopting 2FA security for all login attempts may be advisable, depending on the industry. You can selectively apply 2FA when users attempt to modify or delete data.

Creating different data tiers and requesting an additional piece of information for accessing sensitive data adds an extra layer of security. This approach allows the customisation of data tiers and permissions based on specific risks.

Implementing Two-Factor Authentication (2FA)

2FA implementation in a business or personal environment protects vulnerable networks and databases.

Using a mobile device, you can generate unique alphanumeric codes or tokens to verify your identity. These codes are sent via SMS and verified through a trustworthy website or app. It's crucial to ensure the reliability and safety of the website or app you use for identification.

One-time passcodes generated through apps or websites have a shorter validity period than SMS codes or tokens. Consider the following tips to implement Two-Factor Authentication smoothly:

  • Opt for the commonly used method of SMS authentication, as it offers convenience and ensures verification through a dependable phone number.
  • Keep in mind that most users can activate 2FA through the security settings of their smartphones or electronic devices.
  • Choose the right Two-Factor Authentication provider, considering that each company offering authentication services has its own implementation process.

What are the Factors of Authentication?

  1. Knowledge Factor

In most 2FA setups, the initial authentication factor is knowledge. A knowledge factor refers to something that the user possesses knowledge of, such as a password or personal identification number (PIN). It refers to any piece of information that is known only to the user in theory.

  1. Possession Factor

In terms of security, the possession factor pertains to a classification of user authentication credentials that rely on items the user possesses.

Examples of a possession factor include an ID card, a security token, a telephone, a mobile device, or a smartphone app used to authenticate their identity.

  1. Biometric Factor

A biometric factor, also known as an inference factor, relies on the inherent physical characteristics of the user. The inherent uniqueness of each individual's biometric traits forms a secure basis for accurately identifying the correct user for accessing the appropriate resource.

A biometric factor can include traits like fingerprints, which can be verified using a fingerprint reader, as well as facial and voice recognition. It may also include behavioural biometrics like keyboard dynamics, gait, or speech patterns.

  1. Location Factor

A location factor is determined based on the location from where the authentication attempt is made. This factor can be implemented by restricting authentication to specific devices in a particular location.

In addition, a location factor can track the geographical source of the authentication attempt using the user's mobile phone or other devices, such as Global Positioning System (GPS) data or Internet Protocol (IP) address.

  1. Time Factor

Time-based authentication limits user authentication to a designated time frame, granting access solely within a predefined period. An example commonly used is the time-based one-time password (TOTP), a temporary code generated by an algorithm that incorporates the current time of day as one of its authentication factors.

Addressing Threats with Two-Factor Authentication (2FA)

Stolen Passwords

A staggering 81% of hacking-related breaches involved either stolen or weak passwords. The consequences of a stolen password are severe as it provides hackers with easy access to your accounts. Implementing 2FA is crucial as it adds a layer of security to safeguard your accounts.

Even if someone can obtain your username and password, they would still require a second form of authentication to gain access. 2FA provides extra protection and can effectively mitigate the risks associated with stolen or compromised passwords.

Phishing Attempts

Phishing refers to fraudulent attempts to obtain sensitive information like usernames, passwords, or credit card details. Scammers disguise themselves as trustworthy entities, often through emails, tricking victims into entering their login credentials on counterfeit websites.

Once acquired, passwords can be exploited by attackers. 2FA addresses and combats phishing by introducing a secondary validation step after entering the password.

Social Engineering

Social engineering is a deceptive tactic employed by attackers to manipulate users into sharing personal information or carrying out tasks that compromise account security.

Exploiting human psychology, scammers gain trust and obedience from victims, such as impersonating high-ranking officials to request login information. 2FA safeguards against such attacks by verifying the location and IP of each login attempt following password entry.

Brute-Force Attacks

Brute-force attacks involve automated software repeatedly guessing passwords until they succeed. These attacks pose a significant threat, particularly when passwords are weak or easily guessed.

Strong passwords may boost security, but ultimately, persistent attackers may succeed in cracking them. The additional layer of protection provided by 2FA requires the validation of a login attempt before granting access, making it more challenging for brute-force attacks to succeed.

Key Logging

Keylogging is a sophisticated method for installing malware on a computer to record every keystroke on the infected device. This enables hackers to capture login credentials, credit card numbers, and other sensitive information.

Once installed, it becomes challenging to prevent keylogging. By incorporating 2FA, users can verify that the login attempt is genuine, even if their password has been compromised and recorded through keylogging techniques.

Other Threats

2FA offers protection against other threats, such as unauthorised access due to lost or stolen devices and attempts to take over user accounts. 2FA implementation significantly enhances overall security and reduces the risk of falling victim to different cyber-attack types.

Industries that Utilise Two-Factor Authentication (2FA)


Banks and financial corporations understand the importance of providing a high level of security while ensuring convenience for clients who value data privacy. In the finance sector, a common use case for 2FA is the familiar ATM process.

When accessing your account, you need both your PIN (something you know) and your ATM card (something you have). In such cases, Two-Factor Authentication is crucial for building customer trust and loyalty in the long term.


With the increasing accessibility of data in healthcare, the industry faces a higher risk of data breaches. Healthcare portals, for instance, have become popular for transmitting electronic records, creating more opportunities for hackers to target patient and provider accounts.

Medical records contain sensitive data that cannot be treated like a stolen credit card number, making healthcare providers prime targets for hackers. Implementing 2FA Authentication must be a top priority for healthcare providers to safeguard against data breaches and meet legal requirements for accessing protected health information.


The growth of e-commerce sales has been remarkable, but unfortunately, so has the rise in e-commerce fraud. Account takeover is a rapidly growing threat, resulting in significant financial losses for e-commerce companies.

Companies can effectively prevent e-commerce fraud by adding 2-Factor Authentication to online accounts. This not only reassures customers about the security of their data but also acts as a deterrent for hackers who tend to target less secure websites.

By reducing the risk of fraud through multi-factor authentication, e-commerce companies can enhance their profitability and establish a reputation for protecting customer data.


Government employees are prime targets for cyberattacks due to their access to sensitive information, including financial, economic, and military records. Hackers often employ phishing scams, posing as trustworthy sources to gain access to login credentials.

Many government websites now require 2FA security as a standard practice to combat this threat. The consequences of a cyberattack on government systems extend beyond compromised networks, as high-profile data breaches have disrupted government services and exposed the private information of millions of individuals.

Higher Education

In higher education, institutions handle extensive amounts of sensitive user data, including financial, healthcare, and personally identifiable information (PII). Unfortunately, these valuable data sets have historically made institutions attractive targets for hackers and security breaches.

To enhance security, colleges and universities implement 2FA Authentication to protect the mobile devices and personal computers used by students, faculty, and staff. By securing these devices, institutions can combat malicious actors by verifying the identity and location of every login attempt.


The retail industry comprises millions of establishments with a total annual U.S. GDP of $2.5 trillion. As the largest employing industry in the country, the risk of remote attacks has become increasingly prevalent and challenging to mitigate.

As the retail industry adapts to a perimeter-less IT environment, robust security solutions are crucial. Implementing 2FA allows retail companies to authenticate user identities when accessing their networks through remote desktops and personal mobile devices.

Social Media

Social media platforms are powerful tools for business owners, offering benefits such as brand awareness, increased website traffic, and customer support. However, if social media accounts are not securely managed, they become vulnerable to exploitation by hackers.

2-Factor Authentication serves as an additional layer of security for social media accounts. It is an account security feature that requires individuals attempting to access an account to provide additional authentication or data before gaining entry.

Even if someone hacks into an email account and resets the password for a social media platform like Facebook, they cannot log in without entering the second authentication piece, typically a code sent to a mobile number or generated by an Authenticator app. This added security measure provides greater protection against unauthorised access.

Is Two-Factor Authentication Secure?

Relying on a single factor, such as a password, for account login is comparable to having a lone, and notably weak, lock on your front door. Two-factor Authentication adds an extra layer of security, akin to having two locks on your door, enhancing the level of protection.

For instance, a strong password combined with a secure biometric factor like fingerprint recognition provides stronger security than a weak password paired with an easily compromised factor.

Even if a hacker gains knowledge of your username and password, they cannot access your account without the second credential or authentication factor.

Whilst Two-Factor Authentication or 2FA secures applications effectively, it is not always a foolproof solution for all scenarios. Selecting the appropriate 2FA method is a must, as using an ineffective solution can burden users without providing significant security benefits.

Some businesses view 2FA as merely a compliance requirement rather than an opportunity to mitigate fraud. In some cases, organisations may even employ subpar 2FA technologies, such as browser fingerprinting, to meet compliance standards while minimising user impact.

A more effective approach is implementing a flexible authentication mechanism that mandates 2FA for high-risk transactions while allowing single-factor authentication for common, low-risk operations. This approach strikes a balance between user convenience and fraud prevention.

Thus, two-Factor Authentication (2FA) effectively prevents unauthorised access to our accounts and is a part of the Multi-Factor Authentication (MFA) setup that incorporates two or more authentication steps for added security.

MFA, as the name suggests, involves multiple authentication factors such as a password, confirmation code, and biometric data. With MFA, users are required to provide information from various sources to verify their identity and gain access to systems.

If you're interested in a secure user access management solution, take a look at InstaSafe's Multi-Factor Authentication.

Schedule a demo today to explore the features further!

Frequently Asked Questions about Two-Factor Authentication (2FA)

  1. Who uses 2FA?

Two-Factor Authentication is used by users and organisations across various industries like retail, healthcare, finance, higher education, etc. Users commonly employ it to secure their personal online accounts, such as email, social media, and banking platforms.

Additionally, businesses of all sizes, including small and large enterprises, implement 2FA to protect their networks, sensitive data, and user accounts.

  1. How effective is 2FA?

2FA security is considered highly effective in enhancing security compared to relying solely on passwords. The solution reduces the risk of unauthorised access by adding an extra layer of authentication, usually through a separate device or application.

It provides an additional barrier for attackers, as they must possess the user's password and the second factor (e.g., a token, biometric, or unique code) to gain entry.

While no security measure is entirely foolproof, 2FA greatly improves security and is widely recommended by cybersecurity experts.

  1. What is Zero Trust, and how is 2FA related?

Zero Trust is a security approach that assumes no implicit trust in any user or device, even if they are inside the network perimeter. It emphasises continuous verification and authentication of every access request.

2FA aligns with the principles of Zero Trust with an additional layer of authentication beyond the traditional username and password. It helps validate the user's identity and strengthens access controls. It also contributes to the overall Zero Trust security framework.

  1. How does 2FA protect businesses?

Two-Factor Authentication for businesses adds a layer of protection against unauthorised access and potential data breaches. Businesses reduce the risk of password-related attacks, such as credential stuffing, phishing, and brute-force attacks, with a 2FA solution.

It ensures that even if an attacker obtains or guesses a user's password, they still need the second factor to gain access. This enhances the organisation's security posture, safeguarding sensitive data, systems, and user accounts.

  1. How secure is Two-Factor Authentication?

Two-Factor Authentication (2FA) is generally considered a secure method of protecting accounts and systems. It improves security compared to relying solely on passwords.

The second factor, whether it's a physical token, a generated code, a biometric measure, or a push notification, adds an extra layer of authentication that makes it much harder for attackers to gain unauthorised access.

The effectiveness of 2FA security also depends on the implementation and security of the specific factors used. One must use reputable and trusted 2FA methods and keep the factors protected to ensure the highest level of security.

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