Setting SFTP/SSH authentication mode
The SFTP/SCP service supports various forms of user authentication. These include password, publickey, password OR publickey and password AND public key.
For more information about the other settings depicted in the image above, read Adding an SFTP/SCP Service.
password - User must authenticate with password only.
publickey - User must authenticate with a private key that corresponds with a public key installed on the server.
password OR publickey - User must authenticate with password OR with a private key that corresponds with a public key installed on the server.
password AND publickey - User must authenticate with password AND with a private key that corresponds with a public key installed on the server. This mode is already considered 2-factor authentication (2FA).
See also
Using public key authentication in SFTP/SSH