The European Union's PSD2 directive introduces strong customer authentication requirements for card-not-present transactions, which go beyond traditional two-factor authentication methods. Twilio's Authy API can help organizations meet these requirements by using push authentication, which is the most secure and user-friendly method, but also has a secondary option of SMS-based authentication. Push authentication allows users to view payment details before authenticating with a single touch, while SMS-based authentication requires encryption and includes transaction information in the message or spoken via voice. Both methods can meet the requirements for dynamic linking, but push authentication is considered the best approach due to its security and user experience benefits.