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Two-Factor Authentication Market Size

ID: MRFR//2499-CR | 114 Pages | Author: Shubham Munde| February 2020

The Two-Factor Authentication (2FA) market is influenced by a multitude of factors that collectively shape its growth and dynamics. A key driver is the escalating concern for cybersecurity in the digital age. As instances of cyber threats, data breaches, and identity theft rise, organizations and individuals alike seek robust security measures, making 2FA a crucial component of secure authentication systems. The heightened awareness of the vulnerabilities associated with traditional password-based authentication fuels the demand for 2FA solutions, which provide an additional layer of security through factors such as biometrics, tokens, or mobile devices.

Regulatory requirements and compliance standards significantly impact the 2FA market. Governments and regulatory bodies worldwide are increasingly mandating the implementation of strong authentication measures to protect sensitive information and ensure data privacy. Compliance with regulations such as GDPR (General Data Protection Regulation) and industry-specific standards drives the adoption of 2FA across various sectors, including finance, healthcare, and e-commerce.

The proliferation of online transactions and the digitalization of services contribute to the expanding scope of the 2FA market. With the rise of e-commerce, online banking, and digital communication, the need for secure user authentication becomes paramount. 2FA provides an additional layer of defense against unauthorized access, protecting user accounts, financial transactions, and sensitive data from cyber threats. The convenience and effectiveness of 2FA in safeguarding digital interactions make it an integral part of the evolving landscape of online services.

The continuous evolution of cyber threats and hacking techniques propels the innovation in 2FA technologies. As cybercriminals become more sophisticated, the 2FA market responds with advanced authentication methods such as facial recognition, fingerprint scanning, and behavioral biometrics. The ongoing development of these technologies ensures that 2FA remains a robust defense against emerging security threats, providing users with adaptive and resilient authentication solutions.

User experience and ease of implementation play a crucial role in influencing the adoption of 2FA. Organizations and service providers recognize the importance of balancing security with user convenience. 2FA solutions that offer seamless integration into existing workflows, user-friendly interfaces, and minimal disruption to user experience gain preference. The user-centric approach contributes to the widespread acceptance of 2FA, as individuals and organizations seek security solutions that do not compromise usability.

The remote work trend and the increasing use of mobile devices impact the 2FA market. With more employees accessing corporate networks and sensitive data from various locations, the need for secure remote authentication grows. Mobile-based 2FA methods, such as authentication apps or SMS verification, align with the mobile-centric work environment, providing a convenient and secure means of user authentication.

The cost-effectiveness of 2FA solutions is a significant market factor. As the awareness of cybersecurity threats grows, businesses of all sizes seek cost-efficient ways to enhance their security posture. 2FA solutions, ranging from hardware tokens to app-based authentication, offer scalable and budget-friendly options for organizations looking to implement strong authentication measures without incurring exorbitant costs.

Competition among 2FA solution providers and strategic partnerships contribute to market dynamics. Established players and emerging companies continually innovate to offer diverse and advanced authentication solutions. Partnerships with technology vendors, cybersecurity firms, and industry stakeholders further drive innovation and expand the reach of 2FA solutions across different sectors.

Interoperability with existing systems and standards is essential for the widespread adoption of 2FA. Organizations often look for solutions that seamlessly integrate with their current authentication infrastructure, minimizing disruptions and compatibility issues. The ability of 2FA solutions to work harmoniously with various platforms and protocols enhances their appeal, making them versatile choices for organizations seeking robust and interoperable security solutions.

Covered Aspects:

Report Attribute/Metric Details
Market Size Value In 2022 USD 14.65 Billion
Growth Rate 17.26% (2022-2030)

Two-Factor Authentication Market Overview

Two-Factor Authentication Market Size was valued at USD 17.2 billion in 2023. The two-factor authentication market industry is projected to grow from USD 20.3 Billion in 2024 to USD 72.1 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 17.2% during the forecast period (2024 - 2032).The increasing number of online transactions, rising security breaches, and compliance with regulatory norms are expected to boost the two-factor authentication segment market growth.

Two-Factor Authentication Market Overview

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Two-Factor Authentication Market Trends

Increasing Security Threats to Boost Growth

The rise in data breaches and cyber-attacks is expected to propel the growth of the multi-factor authentication market. Cyber data breaches are identified as gaining unauthorized access to a computer system or network to obtain private, sensitive, or confidential personal and financial information from customers or users. Due to the numerous planned breaches, there is a need to enforce Mobile User authentication to prevent data breaches with endpoint detection and response (EDR), biometric technology, cloud security, code audits, and embedded system security assessments.

For instance, in July 2021, according to the Cost of a Data Breach Report 2021 published by IBM, a US-based technology corporation, the data breach costs increased significantly year over year, rising from USD 3.86 million in 2020 to USD 4.24 million in 2021. Furthermore, in July 2021, according to the Identity Theft Resource Center (ITRC) report, U.S. data breaches were up 38% in the second quarter (Q2) of 2021 compared to the first quarter (Q1). Therefore, the rise in data breaches and cyberattacks is driving the growth of two-factor authentication.

Moreover, launching new mobile banking platforms leads to a high market growth opportunity. Today, there are thousands of digital platforms to make payments. The emergence of E-commerce enterprises is leading to more adoption of digital payments. In the upcoming years, online shopping will be a primary preference of customers. Due to this, digital payments are expected to surge massively. The growing mobile banking will lead to high opportunities for the two-factor authentication market. Especially, the market will have more demand for OTP generation and network security. These market opportunities will expand the overall industry growth.

Two-Factor Authentication Market Segment Insights

Two-Factor Authentication Type Insights

Based on the type, the two-factor authentication market segmentation includes public key infrastructure and one-time passwords. The one-time password segment held the majority share in 2021, accounting for approximately 56-60% of the two-factor authentication market revenue. OTPs are unique and automatically generated passwords that can only be used once. This authentication method is extremely safe because the SMS is only transmitted to the linked mobile number. Moreover, the password changes every time and can only be used once. This offers an extra layer of protection and protects users from intrusive attacks.

Two-Factor Authentication Market

Two-Factor Authentication Model Insights

Based on the model, the two-factor authentication market segment includes a smart card with biometric technology, a smart card with PIN service, biometric technology with PIN, and a one-time password with PIN. Smart card with PIN service dominated the market in 2021 and is expected to be the fastest-growing segment during the forecast period of 2022-2030. It is gaining huge popularity in the two-factor authentication industry as it acts like a portable personal security device. Debit/credit cards are one of the most prominently used smart cards that make millions of transactions securely every day.

Two-Factor Authentication Technology Insights

Based on the technology, the two-factor authentication market segmentation includes the mobile PKI office suite, SafeNet OTP authenticators, out-of-band authenticators, PKI authenticators, and logical & physical access control. The SafeNet OTP authenticators segment had the highest market revenue share in 2021. The reason is the feasibility and economic prices providing a required level of security to the businesses. This technology enables organizations to authenticate the digital identities of users using multiple parameters such as knowledge-based, possession-based, and inherence-based factors.

Two-Factor Authentication End-User Insights

Based on the end-user, the two-factor authentication market segment includes consumer electronics, banking & finance, healthcare, travel & immigration, and military & defense. In 2021, the banking & finance segment held the highest market revenue share. The banking & finance sector deals with many private, sensitive, and confidential data. Increasing cyber threats and growing security breach risks lead to high-value data loss. Two-factor authentication does not allow access to unauthorized users and prevents identity theft and fraud. The need for high data security, regulated cash transaction, and secure data transfer in banks and insurance companies are some factors expected to drive demand for two-factor authentication in the banking & finance sector. In addition, stringent regulations and mandatory government compliances are expected to drive the adoption of two-factor authentication further and drive revenue growth of the segment over the forecast period.

Two-Factor Authentication Regional Insights

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The North American two-factor authentication market is anticipated to expand at a significant CAGR during the study period, accounting for USD 2.09 billion in 2021 owing to the strong data security infrastructure and stringent government regulations regarding the use of multi-factor authentication for cyber security purposes. For instance, financial organizations that process and store card payment information in the USA must comply with PCI-DSS and offer two authentication factors to ensure customer security.

Moreover, the major countries covered in the market report include the United States, Germany, Canada, France, the United Kingdom, Italy, Spain, India, Japan, Australia, China, South Korea, and Brazil.

Two-Factor Authentication Market

The European two-factor authentication market is the world's second-largest due to the huge amounts of technology and digitizing data. Increasing innovations, rising investments, and growing research and development activities are expected to drive revenue growth in the market. The rising need for the prevention of cyberattacks, commercial espionage, fraud, and theft, providing data security and privacy, and prevention of sensitive information leaks for business development are other factors expected to drive market revenue growth in the region over the forecast period. Further, the German two-factor authentication market held the largest market share, and the France two-factor authentication market was the fastest-growing market in the European region.

The Asia Pacific two-factor authentication market is expected to grow at the fastest rate of CAGR during the forecast period. Increasing population, rapid urbanization, and rising digitalization leading to cyber threats in countries such as India, Indonesia, and China are some factors expected to drive revenue growth in the two-factor authentication market. In addition, the inclination of business sectors, such as trading, insurance, and banking, towards efficient and seamless authentication procedures for ensuring secure remote access for users, are rising importance of two-factor authentication in the region. The region's growth can be attributed to increasing spending on connected devices, growing investments in various cloud and IoT technologies, and spiraling demand for digital services. Soaring emphasis on the security of personal data and authentication of online transactions, coupled with increasingly stringent regulatory compliances, is stimulating the demand for two-factor authentication. Moreover, China’s two-factor authentication market held the largest market share, and the Indian two-factor authentication market was the fastest-growing market in the Asia-Pacific region.

Two-Factor Authentication Key Market Players & Competitive Insights

Technological advancement is the key trend gaining popularity in the multi-factor authentication market. Major companies operating in multi-factor authentication focus on developing technologically advanced security services and solutions, such as smart cards and password-less authentication systems, to strengthen their market position. Companies are emphasizing the development of innovative digital identity solutions to gain a competitive advantage over their competitors.

SecureAuth is an identity access management security solution that provides passwordless authentication, multi-factor authentication, SSO, & more. SecureAuth Corporation designs and develops software solutions. The Company offers a platform that enables a secure, passwordless, and continuous authentication experience for employees, partners, and customers. In November 2021, SecureAuth Corporation, a US-based access management and authentication company, acquired Acceptto for an undisclosed amount. The acquisition will enable SecureAuth to capitalize on the growing strategic need for enterprises to better secure identities and support their increasing hybrid workforce, boost digital customer engagement, and migrate to the cloud and zero-trust networks. Acceptto Corporation is a US-based computer and network security company specializing in multi-factor authentication, identity management and access management.

HID provides industry-leading content about physical and logical access control solutions. In April 2021, HID launched WorkforceID Authentication, a workforce two-factor authentication solution, to give enterprises a cloud solution for managing, issuing, and using digital identity credentials for logical and physical access control.

Key Companies in the two-factor authentication industry include

  • Suprema Inc (South Korea)

  • Symantec Corporation (U.S.)

  • OneSpan Inc (U.S.)

  • HID Corporation (U.S.)

  • Gemalto NV (Netherlands)

  • CA Inc (U.S.)

  • Google LLC (U.S.)


  • IDEMIA (France)

  • Fujitsu Ltd (Japan)

  • RSA Security LLC (U.S.)

Latest Industry News of Two Factor Authentication Market:

May 2023:

Microsoft formally rolled out the Moment 3 update for Windows 11, which includes a number of enhancements to various features. Although these improvements will also be included in an obligatory update for the next month, this one is now optional. The ability to copy security codes from alerts is one of the largest changes. As a result, if you use two-factor authentication and get an email notification (or SMS synced from your phone), you may quickly copy that code to the clipboard.

May 2023:

Given that millions of individuals increasingly monitor their health data online via a variety of smart gadgets, Apple has launched a new campaign to emphasize the significance of health data privacy worldwide, including in India. The tech giant has incorporated each of these four pillars into its Health features from the start because it adheres to the four privacy principles of data minimization, on-device processing, transparency and control, and security. iOS generates health metrics on-device to reduce the quantity of health data transferred to Apple's servers. The data in the Health app is end-to-end encrypted for users who have two-factor authentication, a device passcode, and a device running iOS 12 or later. Data in the Health app is therefore unreadable by anyone, including Apple.

March 2023:

Twitter has stated that starting in March 2023, accounts will only be able to enroll in the text message/SMS mode of 2FA if they are Twitter Blue customers. Unless non-blue users introduce a new login method, Twitter will entirely disable two-factor authentication. As Twitter introduces its paid membership package Twitter Blue, which will restrict SMS two-factor authentication to only those users who have paid the monthly fee, it has been rolling out a lot of new capabilities coupled with a few restrictions. The new regulation will go into force on March 20.

August 2021: CEQUENS, an Egyptian Communication Platform as a Service (CPaaS) provider, announced the launch of its new product, 'Verify.' Companies can use the solution to verify online identities and protect online accounts using two-factor authentication.

August 2021: Google confirmed that the YouTube creators would require 2-step verification to access YouTube Studio to access key functions.

Two-Factor Authentication Market Segmentation

Two-Factor Authentication Type Outlook

  • Public key infrastructure

  • One-time password

Two-Factor Authentication Model Outlook

  • Smart card with biometric technology

  • Smart card with PIN service

  • Biometric technology with PIN

  • One-time password with a PIN

Two-Factor Authentication Technology Outlook

  • Mobile PKI office suite

  • SafeNet OTP authenticators

  • Out-of-band authenticators

  • PKI authenticators

  • Logical & physical access control

Two-Factor Authentication End-User Outlook

  • Consumer Electronics

  • Banking & Finance

  • Healthcare

  • Travel & Immigration

  • Military & Defense

Two-Factor Authentication Regional Outlook

  • North America

  • US

  • Canada

  • Europe

  • Germany

  • France

  • UK

  • Italy

  • Spain

  • Rest of Europe

  • Asia-Pacific

  • China

  • Japan

  • India

  • Australia

  • South Korea

  • Australia

  • Rest of Asia-Pacific

  • Rest of the World

  • Middle East

  • Africa

  • Latin America

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