There are three categories of factors used for User Authentication.
Multi-Factor Authentication (MFA) uses factors from more than one category for authentication. It does not mean using multiple factors from the same category—the categories must be different. It is also often referred to as Two-Factor Authentication (2FA) since typically only two out of the three categories are used.
A bank ATM is a classic example of MFA.
Online MFA most often uses:
Multi-Factor Authentication is more secure than traditional password authentication. An attacker must have more than a stolen or cracked password to gain access or make important changes.
Because it increases security, Multi-Factor Authentication is becoming very common. Major websites like Facebook, Twitter, Google, LinkedIn, Amazon, eBay, Github, and Dropbox all either offer MFA as a user option or require its use. A list of the many companies which offer MFA is available at twofactorauth.org.