Passkeys vs Passwords

What Are Passwords and How Do They Work?

A password is a secret combination of letters, numbers or symbols used to prove that you are allowed to access an account.

You enter that secret when signing in, and the service checks it against information stored when the password was created.

Reputable services should not store the password itself.

Instead, they convert it into a scrambled mathematical value known as a hash. The password entered at sign-in goes through the same process. If the two values match, access is granted.

If they do not, you remain firmly on the wrong side of the digital door.

How secure this process is depends on the strength and uniqueness of the password, how safely you manage it, and how securely the service stores its credentials.

Unfortunately, several common habits can weaken that protection:

• Weak or predictable passwords - Short passwords, common words and personal information can be easier for attackers to guess or crack.
• Password reuse - If the same password protects several accounts, one compromised account can provide access to the others.
• Phishing - A convincing email or fake login page can trick someone into willingly handing over their password.
• Credential theft - Passwords can be stolen through data breaches, malware or attacks against the service holding them.
• Poor storage or sharing practices - Writing passwords down, storing them in unsecured files or sharing them through email and messaging platforms can expose them unnecessarily.
  

Password reuse is particularly widespread. A Bitwarden survey found that 48% of respondents frequently reused passwords across workplace platforms or accounts. One compromised password can therefore give an attacker several opportunities to gain access.

Even a strong password can therefore become a weak point if it is reused, mishandled or given to the wrong website.

What Are Passkeys and How Do They Work?

A passkey is a digital credential that allows you to sign in without entering a password.

Instead of relying on a shared secret that both you and the service must recognise, it uses a pair of cryptographic keys that work together.

The public key is stored by the website or service.

The private key remains protected on your device or within the encrypted account used to synchronise your passkeys.

When you sign in, the service sends a request that can only be approved using the corresponding private key.

The private key itself is never shared.

You approve the request using the same method you use to unlock your device, such as your fingerprint, face or PIN.

This combines possession of a registered device with local verification, allowing the passkey to provide Multi-Factor Authentication (MFA) as part of one simple sign-in.

Your fingerprint or facial information is not sent to the website or service.

It is only checked locally by your device to confirm that you are authorised to use the passkey.

The service receives confirmation that the request has been approved, not a copy of your biometric information.

Passkeys are no longer a niche technology. The FIDO Alliance reported that 5 billion passkeys were in active use worldwide by May 2026, showing just how quickly this approach to signing in is becoming established.

Beacon Tip - When you create a work passkey, check where it will be stored. Use a device or passkey provider approved by your IT team, rather than automatically accepting whichever option appears first.

Passkeys vs Passwords - What’s the Difference?

Passwords and passkeys perform the same basic job.

They confirm that you are allowed to access an account.

The important difference is how they do it.

A password relies on a secret that you enter and the service checks.

A passkey uses cryptographic keys and approval from a registered device, so there is no reusable secret to remember, type or hand over.

See below for a clear comparison of the two:

In simple terms, passwords ask you to prove what you know.

Passkeys confirm that you have a registered device and can verify your identity on it.

This removes several of the weaknesses that have made passwords such a dependable nuisance for users and such a useful opportunity for attackers.

Are Passkeys Safer Than Passwords?

Yes.

Passkeys offer stronger protection than passwords because they remove several of the weaknesses attackers regularly exploit.

There is no password to guess, reuse or persuade someone to type into a fake login page.

Phishing resistance is one of their biggest advantages.

Phishing remains the most common cyber threat facing UK businesses. Of those that identified a cyber security breach or attack in the previous 12 months, 88% reported phishing, according to the UK Government’s Cyber Security Breaches Survey 2025/2026.

A fraudulent website might look identical to the real thing, but your browser checks whether its address matches the service your passkey belongs to.

If it does not, that passkey cannot be used there.

A copied logo and a convincing email are not enough.

Passkeys also reduce the risk associated with stolen login databases.

The service stores your public key, which an attacker cannot use to sign in as you.

Each account has its own key pair, so there is no reused password connecting otherwise separate accounts.

These protections are explained in the FIDO Alliance’s passkey security guidance.

However, safer does not mean invulnerable.

Your devices still need protecting, and businesses must secure account recovery and any alternative sign-in methods.

If an attacker can bypass the passkey by exploiting a weak password-reset process, the account remains at risk.

For businesses, the benefit is stronger protection with less reliance on employees remembering complex passwords or spotting every convincing fake.

Passkeys make secure sign-ins easier, but device security and good access management still matter.

How Do Passkeys Compare with Legacy MFA?

If you have ever entered a password and then reached for your phone to confirm a sign-in, you have used a familiar form of MFA.

Here, “legacy MFA” means a password combined with another check, such as a text message code, an authenticator app code or an approval notification.

That extra check provides more protection than a password alone. However, it does not remove every weakness.

An attacker can create a fake login page that collects both your password and a one-time code, then immediately uses them to access the genuine service. As the FIDO Alliance explains, commonly used codes and approval methods can still be phished.

Passkeys take a different approach.

With fingerprint, face or PIN verification, they combine something you have, the device holding your passkey, with something you are or know.

That is MFA within one sign-in process, without a password followed by a separate code. The authentication is also tied to the genuine service, providing phishing resistance.

FIDO’s security guidance explains how these factors work together.

For employees, that means fewer steps.

In its consumer-account rollout, Microsoft reported that passkey sign-ins were 8x faster than signing in with a password and traditional MFA (Microsoft Security Blog, December 2024)

For businesses, it means stronger protection against stolen passwords and codes.

The aim is not to remove MFA, but to use a stronger, simpler form of it.

Where passkeys are unavailable, businesses should continue using the strongest MFA their systems support.

What Are the Benefits and Limitations of Passkeys?

Passkeys can make everyday sign-ins simpler and safer.

However, introducing them across a business takes a little more thought than switching on a setting and declaring passwords somebody else’s problem.

Benefits

• Stronger protection - Passkeys resist phishing and remove the reusable password that attackers can steal or trick someone into revealing.
• Less to remember - There is no account password to create, memorise or forget when signing in with a passkey.
• Simpler sign-ins - A fingerprint, face scan or device PIN can replace entering a password and then completing a separate authentication check.
• Fewer support requests - Reducing reliance on passwords can mean fewer reset requests, fewer interruptions and less administrative work for IT teams.
• Unique credentials - Each account has its own cryptographic keys, removing the risk of someone reusing the same password across several services.

Organisations contributing to the FIDO Alliance’s 2025 Passkey Index reported up to an 81% reduction in sign-in-related helpdesk incidents after adopting passkeys (FIDO Alliance Passkey Index, p7)

Limitations

• Application support varies - Not every website or business application supports passkeys, so they cannot replace every password yet.
• Devices and platforms differ - A passkey available on one device may not automatically be available on another. Businesses need to check how their chosen providers handle synchronisation and cross-device access.
• Recovery needs planning - Staff need a secure way to regain access if a device is lost, replaced or unavailable. Removing passwords does not remove the need for account recovery.
• Shared access needs care - Shared devices and accounts require clear controls over who can use a passkey and how access is removed when someone leaves.
• Legacy systems remain - Older applications may still require passwords and other forms of MFA. Those systems will continue to need appropriate protection while the business adopts passkeys elsewhere.

38% of respondents cited compatibility with legacy systems as a barrier to passkey rollout, while 33% cited concerns about device recovery and restoring account access (The State of Passkeys 2026, p38)

Beacon Tip - Replacing your phone or laptop? Before the old device is wiped or handed back, ask your IT team to confirm that you can access your work accounts on its replacement. Check the agreed recovery process too. A new laptop should not come with a surprise lockout.

Will Passkeys Replace Passwords?

For many sign-ins, yes.

Everywhere, not yet.

Passkeys can remove the need to enter a password, but businesses should expect a gradual transition rather than an overnight switch.

57% of surveyed organisations still rely on password-based methods for employees’ main day-to-day sign-in, including passwords combined with MFA (The State of Passkeys 2026, p29)

You might use a passkey to access your email while an older business application still asks for a password. During that transition, strong, unique passwords, password managers and appropriate MFA will remain important wherever passkeys are not supported.

There is also a difference between signing in without a password and removing that password altogether.

Services can offer passkeys alongside passwords, as FIDO’s implementation guidance explains.

If a password remains available as an alternative way into the account, it still needs protecting.

We first explored whether this was the end of passwords forever back in 2022.

For businesses today, the useful question is less about when passwords will disappear and more about where they can safely stop relying on them.

Start with supported systems, plan recovery carefully and keep the remaining password-based accounts secure.

Should Your Business Start Using Passkeys?

Yes, where your systems support them and you can manage them securely.

The NCSC describes passkeys as an easier, faster and more secure way to sign in.

68% of respondents said their organisation had deployed passkeys, was rolling them out or was actively piloting them (The State of Passkeys 2026, p21)

For your business, the next step is to work out where they fit.

A sensible starting point is to:

• Check what supports them - Review your applications, devices and browsers with your IT team or provider. Include remote working and shared devices, so you understand how passkeys will work in everyday situations.
• Agree how they will be managed - Decide which devices and passkey providers staff can use, where business credentials may be stored and who controls access.
• Start with a small trial - Choose a group of staff with different working requirements. Show them how to register and use passkeys, gather feedback and resolve problems before expanding.
• Test recovery and access removal - Make sure someone can regain access securely if their device is lost, broken or replaced. Check that access can also be removed promptly when an employee leaves.
• Roll out gradually - Expand once the trial is working reliably. Keep strong, unique passwords and appropriate MFA on systems that still need them, and review any alternative sign-in methods.

Beacon Tip - Include a representative mix of staff in your trial, using their normal devices and working routines. Include remote workers and shared-device users where relevant. A smooth demonstration from IT is useful, but everyday use is the real test.

Passkeys should form part of your wider security approach, alongside protected devices, sensible access permissions and staff awareness.

The aim is to make everyday access safer and simpler, with a clear plan for when things do not go quite as expected.

Passkeys vs Passwords - The Verdict

Passkeys come out ahead for security and everyday convenience. They resist phishing, remove the problem of password reuse and make signing in simpler.

When combined with fingerprint, face or device PIN verification, they provide MFA as part of that sign-in, rather than replacing it.

That does not mean every business can abandon passwords tomorrow.

Application support, device management and account recovery all need consideration. Where passwords remain necessary, strong, unique credentials and appropriate MFA still matter.

Beacon’s view is straightforward:

Start reducing your reliance on passwords where it makes practical sense.

Introduce passkeys gradually, support your people through the change and keep device security and access management firmly in place.

You do not need a completely password-free business to start benefiting from fewer passwords.

Want to make signing in simpler and more secure for your team? We’ll help you understand where passkeys could fit, what needs to stay protected and how to make the transition work for your business. Speak to us about reviewing your sign-in security.

Frequently Asked Questions

Can passkeys be hacked?

Passkeys offer strong protection against phishing, but they do not make an account invulnerable.

Attackers may still target weak recovery procedures or an alternative password sign-in.

Protecting your devices and every remaining way into the account still matters.

Microsoft’s security overview explains these risks.

What happens if I lose the device containing my passkey?

It depends on how the passkey is stored.

A synced passkey may remain available on another compatible device.

If it exists only on the lost device, you will need another registered sign-in method or the service’s recovery process.

Report the loss to your IT team promptly so they can secure access.

Can passkeys be used on multiple devices?

Yes, depending on the provider and your business’s settings.

Synced passkeys can be available across compatible devices.

Device-bound passkeys stay on their original device, although supported cross-device sign-ins can let you use a phone or security key to access an account on another computer.

Do passkeys replace password managers?

No.

Password managers remain useful for accounts that still require passwords, and many can also store and synchronise passkeys.

They can therefore help you manage both during the transition.

Use a provider approved by your business.

Does Microsoft 365 support passkeys?

Yes.

Microsoft 365 work accounts support passkeys through Microsoft Entra ID, which manages sign-ins.

Options include Microsoft Authenticator, physical FIDO2 security keys and supported synced passkey providers.

Availability depends on your organisation’s settings and device compatibility, so your IT team should check and configure the rollout.

Microsoft’s setup guidance explains the requirements.