Two-Factor Authentication
Two-factor authentication refers to systems that use two different sources for authentication - like something an individual knows and something an individual has.
When someone uses an ATM machine a card and a PIN number are required. This is an example of two-factor authentication - one factor, something the user knows (PIN number), and the other factor, something the user has (card), are required for authentication.
If fraud pepetrators steal an ATM card they cannot use it to access an ATM machine unless they know the card owner's PIN Number. If they know a card owner's PIN Number but do not have the owner's ATM card they cannot access an ATM machine.
Many banks now require two-factor authentication for account access or funds transfer, because they believe that this additional level of authentication will help to reduce illegal online account access and online fraud - see Interactive Demonstrations: "Two-Factor Authentication" for a hands-on presentation of a two-factor authentication system.