Two-Step Verification vs Two-Factor Authentication: What's the Difference?

The high risk of a security breach makes protective measures, such as two-factor authentication (2FA) and two-step verification (2SV), non-negotiable for businesses. 

An all-in-one solution like Plivo’s Verify API enables you to use 2FA and 2SV to confirm a user’s identity, yet these options operate in distinct ways that can impact your customer experience.

In this guide, we will share in-depth information about two-step verification vs two-factor authentication: their processes, semantic differences, security advantages, and how to determine which option is right for your company. 

What is two-factor authentication (2FA)?

Consumers often use two-factor authentication (2FA) in their day-to-day transactions, such as online banking, digital payments, accessing apps on their mobile devices, and others. 

Two-factor authentication uses two separate factors from different categories to authenticate a user and complete the login process. These categories could be something you know (like a password), something you have (like a smartphone or hardware token), or something you are (like a fingerprint or facial recognition). 

For instance, 2FA could require the user to know a password as well as a code from an authentication app, a fingerprint, or facial recognition. Typically, the user will type in their username and password on a device,  and then the website sends a separate one-time code (OTP) via text, voice call, or mobile app to enter the login page. Or, the user inputs their password and then uses a fingerprint or facial recognition on a separate device, like a phone or tablet, for authentication. 

This combination of using different factors from separate categories makes it significantly harder for a hacker to breach an account, even if they have the user’s password. They will still lack access to the second method (another device or biometric data). 

Examples of two-factor authentication

Here are some real-world examples of 2FA.

• Password and facial recognition on a laptop: After entering the credentials, users must complete the login by scanning their face using their laptop's built-in camera.
• Password and security token: A user inputs their password and then enters a code generated by a physical security token, such as a YubiKey.
• Password and push notification approval: A user enters their credentials on the desktop and then approves a push notification sent to their mobile device to confirm their login.

Benefits of two-factor authentication

• Provides better security: This multi-layered approach is especially effective in thwarting cyber attacks by requiring multiple forms of identification.
• Provides enhanced protection against phishing: Phishing attempts rely on social engineering to trick individuals into revealing passwords. However, biometric info or physical tokens can't easily be compromised through these methods. Even if a password is stolen, the second factor, such as a fingerprint or a security token, remains secure. 
• Designed to enhance customer trust: 2FA boosts user confidence and trust in account security. This leads to higher user satisfaction, engagement, and loyalty as customers feel more secure in their online interactions. 

Challenges of two-factor authentication

• Costs can easily escalate: Implementing 2FA can be costly and complex, requiring significant investment in new technologies, training, and ongoing maintenance and support. These costs can be a barrier for smaller businesses or those with limited budgets.
• Adoption by consumers may take time: Additional steps to log in can be seen as inconvenient, leading to potential resistance from users who prefer simpler, single-step logins. 
• Managing two devices adds complications: Losing the device used for 2FA can lock users out of their accounts, making it complex and time-consuming to recover access. Likewise, the need for two devices can be inconvenient or inaccessible for some customers. 

What is two-step verification (2SV)?

2SV also involves two verification stages, but unlike 2FA, which relies on two different methods, two-step verification relies on two knowledge factors. 

Compared to a simple one-step login process, 2SV is considered more secure. A user needs to know two separate pieces of information to access their account. However, 2SV is considered less secure compared to 2FA. 

How does 2SV work?

2SV generally involves the following steps:

1. The user enters their password to initiate the login process.
2. The user provides a one-time code sent to a registered device or answers a preset security question. The code is often sent via SMS, email, or generated by an authenticator app.

By requiring these two steps, 2SV ensures that even if an attacker obtains the user's password, they would still need access to the second verification method to gain entry.

Examples of two-step verification 

Here are some examples of 2SV in action:

• A one-time PIN in email or text: After entering their username and password, the user receives a single-use PIN or link to enter to access an account. Unlike push notifications, texts and emails are protected by their own passwords, making this method part of the same authentication category (knowledge factor) as the initial password.
• Security questions: Users are required to answer one or more security questions before they can complete the login process. This additional step ensures that only individuals who know the correct answers can gain access.
• Recovery codes: These are unique, system-generated codes provided when a password is forgotten, allowing users to regain access to their accounts. Often referred to as temporary passwords, recovery codes serve as a backup method for account recovery.

Benefits of two-step verification 

• Provides enhanced security: 2SV adds an extra layer of protection beyond just a password. This dual-step process makes accessing an account more challenging for unauthorized users.
• Easy to implement: Implementing 2SV is generally straightforward and can often be integrated with existing systems without major modifications. This makes it an accessible option for many organizations, regardless of size and budget.
• Better accessibility and experience for users: Users don’t need to switch between different devices or methods while logging in. They can access their accounts from anywhere with just a single device.

Challenges of two-step verification 

• More susceptible to phishing: While 2SV is more secure than using a password alone, it can still be vulnerable to phishing attacks, especially if the second verification step involves SMS verification or email codes. 
• Security questions weakness: Using security questions as a second factor can be weak, as answers can be guessed or found through social engineering. For instance, many people use security questions like their mother’s maiden name, which hackers can easily discover on social media. 
• Recovery process complexity: If users lose access to their registered device, they may be unable to complete the second verification step, which locks them out of their accounts. Recovery processes can be complicated and time-consuming, adding inconvenience.

What’s the difference: two-step verification vs two-factor authentication

Here’s a simple chart to illustrate the difference between two-factor authentication vs two two-step authentication. 

Picture the safety features of a car. All airbags are safety features, but not all safety features are airbags. 

Similarly, every two-factor authentication is a form of two-step verification, but not all two-step verification methods qualify as two-factor authentication.

The key difference between two-step verification vs. two-factor authentication? 2FA requires two factors from separate categories. On the other hand, 2SV has two knowledge factors, such as a password followed by a code sent via SMS text message or email​. 

For example, logging into your bank account using 2FA might involve entering your password (something you know) and then scanning your fingerprint (something you are). This approach uses two distinct types of factors, significantly enhancing security. 

In contrast, 2SV for logging into an email account might involve entering your password (something you know) and then entering a code sent to your email or phone (also something you know). 

Why 2FA is considered better than 2SV

2FA is inherently more secure and trusted in industries such as banking, government, and healthcare due to its use of varied authentication factors. 

Other security tips for verifying access

To enhance the security of your accounts and systems, consider implementing the following additional measures.

1. Use strong, unique passwords: Use passwords that are long, complex, and unique for each account. Avoid using easily guessable information like common words, birthdays, or names.
2. Enable multi-factor authentication (MFA): Whenever possible, use MFA, which combines several types of authentication factors, such as something you know (password), something you have (hardware token), and something you are (biometric data).
3. Use authenticator apps: Authenticator apps are less susceptible to interception and SIM-swapping attacks. Authenticator apps generate time-based one-time passwords (TOTPs) that can only be accessed on the registered device​.
4. Secure your devices: Lock your devices using passwords, PINs, or biometrics. Also, regularly update your devices to the latest software versions to protect against vulnerabilities​.
5. Monitor account activity: Regularly check your account activity for unauthorized access attempts. Many services will notify you of suspicious login attempts so you can quickly respond to potential threats​.
6. Educate yourself and your users: Stay informed about the latest security threats and best practices for online security. Awareness and education are key to defending against the evolving threat landscape.

By combining these security measures with 2SV or 2FA, you can significantly enhance the protection of your accounts and sensitive information, making it much harder for unauthorized users to gain access.

How Plivo uses 2FA to strengthen your privacy and security

Plivo is designed to build strong defenses for businesses and operators. We assume that a cyber attack is always imminent and focus on providing the best user experience with intuitive and easy-to-use authentication technologies.

1. Increase conversion rates using multiple channels

All 2FA voice and SMS OTP messages must be delivered to the user’s device quickly. Plivo’s powerful platform ensures those messages arrive within a few seconds to avoid disrupting the customer experience. 

Plivo flags invalid phone numbers, identifies the fastest and most reliable route for message delivery, and supports high-volume messaging to guarantee that OTPs reach users promptly. This seamlessly increases conversion rates by ensuring that users can access services without delays or security concerns.

2. Reduce errors with phone number lookup

Plivo’s new Lookup API can automatically determine the format, type, country, and carrier for any phone number worldwide. This detailed information helps you assess risk, prevent fraud, block fake accounts, and increase customer acquisition without additional user input.

3. Reduce the total cost of ownership 

Plivo provides a direct route to end users with a maximum of one hop, ensuring there is no route dilution or blending. This capability allows users to make calls and send SMS text messages globally without delays or the cost of repeated undelivered messages.

Pricing for Plivo's Lookup API starts at $0.004 per request. Bundled packages are available with monthly fees for further savings.

After using the allocated API requests in each plan, additional requests cost $0.004 for each additional request. 

Plivo’s 2FA fraud protection features 

• Geo permission management: Plivo lets you control the list of destination countries for SMS text messages and voice calls from your account. This feature allows you to disable communications to high-risk countries where you do not have users.
• ‍International toll fraud protection: Manage connectivity to global high-risk premium numbers prone to international toll fraud. You can also maintain your own destination number blacklists for greater control and security.‍
• Pattern-based alerts: Set up alerts for unusual SMS or voice activity on your account. Trigger alerts when there is a significant drop in delivery rates, indicating potential messaging to invalid or unallocated phone numbers.

Conclusion

While both two-step authentication and two-step verification are great at safeguarding your customer’s data, 2FA offers greater security by using different types of authentication factors. 

Ultimately, choosing the right authentication method depends on your business needs and the level of security you require. Implementing 2FA can significantly enhance your security posture, providing peace of mind for both you and your customers.

Ready to implement a 2FA solution for your business? Get started with Plivo.