Passkeys are an emerging form of passwordless authentication that’s increasingly recognized for its potential in online security. Designed to replace traditional passwords, passkeys provide a highly secure login method that minimizes risks associated with common vulnerabilities like phishing and credential-stuffing. As security demands rise in digital payments and online transactions, passkeys offer a way to reduce fraud risks while maintaining a user-friendly experience.
Passkeys are a form of passwordless authentication that use biometric data, like fingerprints or facial recognition, in conjunction with device-based security. Passkeys are based on FIDO (Fast IDentity Online) Alliance standards, an industry initiative focused on password-free authentication.
Passkeys add a layer of security by linking authentication to specific devices. This approach aims to close off common vulnerabilities related to passwords. Major companies like Apple, Google, and Microsoft are pushing passkeys as a replacement for passwords, especially in areas with high-security needs, like online payments and account-based services.
Passkeys work by creating a cryptographic key pair—one public and one private—linked to a user’s device. The private key remains securely stored on the user’s device, while the public key is shared with the authenticating server. When logging in, users authenticate themselves using the existing biometric authentication features on their smartphone, such as a fingerprint or face scan. This authentication unlocks the private key, which allows the device to securely confirm the user’s identity with the server without transmitting the private key itself.
This process has significant advantages over passwords, which require users to remember and enter credentials that can be intercepted or stolen. By keeping private keys localized on devices, passkeys create a far less accessible target for cybercriminals. Instead of depending on memorized passwords or SMS-based two-factor authentication (which has its own vulnerabilities), passkeys anchor security in cryptographic principles and biometrics, making unauthorized access more challenging.
The use of passkeys for user logins can be an effective way for businesses to reduce the risk of fraud. Specifically, passkeys are an excellent defense against account takeover attacks, where an unauthorized third-party gains access to an account and uses it to make unauthorized purchases with stored payment credentials. Account takeover attacks are typically enabled by either credential stuffing or phishing, both of which are prevented by passkeys.
Credential-stuffing exploits the widespread reuse of passwords across various sites. When one site falls victim to a data breach, cybercriminals can use automated scripts to try lists of stolen login credentials across multiple platforms, accessing accounts where users have reused their passwords. Passkeys can eliminate this risk by completely replacing passwords with cryptographic keys that are unique to each device and service, making credential-stuffing techniques ineffective.
Phishing is a common fraud method where users are tricked into providing login details by a fraudster pretending to be a trusted person or organization. Phishing can occur through emails, text messages, phone calls, or fake websites. If a victim of phishing uses passkeys, however, they won’t have a password to give the fraudster.
While passkeys offer significant protection against certain fraud methods, they aren’t completely foolproof. Understanding these potential vulnerabilities helps inform their application and management in high-security environments.
Since passkeys are tied to physical devices, a lost or stolen device can become a security risk if the user hasn’t implemented sufficient device-level security. For example, if a smartphone with a passkey is stolen and the device uses an easy-to-guess PIN, an unauthorized user could potentially access protected accounts.
In addition, biometric authentication is not entirely immune to threats like spoofing. Hackers have successfully bypassed biometric systems in the past using methods ranging from photocopies to high-quality replicas. The good news is that modern biometric authentication systems are more secure than ever, using techniques like liveness detection to make spoofing far more difficult.
Social engineering attacks target users rather than technology, aiming to trick them into revealing sensitive information or completing certain actions. While more complicated than traditional phishing, users can still be manipulated into taking actions on their own without realizing the consequences, such as changing the security settings on their account or even initiating a funds transfer.
Passkeys can enhance user experience by simplifying the login process, but some potential points of customer friction exist, especially regarding compatibility and accessibility.
By removing the need to remember and enter complex passwords, passkeys can significantly streamline the user experience. This approach benefits users who prefer fast access, particularly in high-frequency transaction environments. However, passkeys also require a setup process that most consumers will be unfamiliar with, which can increase friction during account creation.
Another point of friction with passkeys involves multi-device compatibility. While a passkey set up on one device offers convenience, accessing the same account on a different device can require additional steps. Fortunately, many use cases will allow the user to be sent an authentication prompt on their smartphone, even if that’s not the device they’re using to log in.
Some users may lack devices compatible with passkey technology, specifically those using older smartphones. This could introduce friction for customers who are otherwise interested in adopting passkey technology but are limited by device requirements.
The adoption of passkeys is growing, particularly as major tech companies integrate passwordless options into their platforms. Apple, Google, and Microsoft have incorporated passkey functionality into their systems, encouraging a shift away from traditional passwords. This support is fostering a wider acceptance of passwordless authentication in various industries.
While passkey adoption is accelerating, challenges related to regulatory compliance, compatibility with legacy systems, and consumer adoption remain. Businesses that invest in passkey technology early could see a slight reduction in fraud, but the broader market will likely require time to transition fully to passwordless authentication.