PayPal Enters Passwordless Future With Passkey Launch

PayPal has announced plans to replace passwords with passkeys, adding a new level of security while catering to a growing cohort of consumers who want password-free commerce.

“Passkeys are a new industry standard created by the FIDO Alliance and the World Wide Web Consortium that replace passwords with cryptographic key pairs…,” PayPal said in a news release Monday (Oct. 24).

The company said in the release passkeys offer customers a secure log-in method using technology that is “resistant to phishing and designed so that there is no shared passkey data between platforms.”

Passkeys will roll out first to iPhone, iPad or Mac users on PayPal.com before expanding to other platforms as they add support for passkeys. PayPal is a founding member of the FIDO (Fast Identity Online) Alliance and one of the first financial services providers to offer passkeys for a broad swath of its customers, according to the release.

The technology addresses “one of the biggest security problems on the web, which is the weakness of password authentication,” the release stated. They also allow for smoother checkout, as customers won’t need to remember a password.

And that’s something most consumers want, according to the PYMNTS Digital Fraud Tracker, which found that a majority of individuals would go beyond passwords if given the opportunity.

Read more: 68% of Consumers Want to Keep Passwords Off Their Apps

PYMNTS research found that 68% of consumers would be willing to use non-password login options on their mobile apps. Another 54% said they would be willing to do the same on their mobile device browsers. Almost half of the consumers surveyed (49%) said they would choose to use non-password methodologies on their computer browsers.

Those findings come as three-quarters of businesses said that developing better fraud detection processes is important. The urgency is apparent, as there were a record 1,025,968 phishing attacks worldwide in the first quarter of 2022.

In an interview with PYMNTS, Entersekt Chief Technology Officer Gerhard Oosthuizen said that strong authentication and application programming interfaces (APIs) would go a long way toward fostering friction-free commerce.