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Are passwords becoming a thing of the past?

Security is paramount in SaaS. SaaS applications routinely handle sensitive business data; authentication is how you keep that data safe. From the first online password user to those who created VPN protocols, many have tried to crack the cybersecurity problem.

But passwords are not always up to the challenge.

Plus, don’t we all have too many passwords as it is? Passwords are easy to forget, causing users frustration when they cannot log in. And as AI tools advance, password cracking becomes easier than ever.

For all these reasons, SaaS providers are looking to a future without passwords. Let’s take a look at the passwordless options to see what works for your products.

Magic links

This method sends a unique and time-sensitive login link to the user’s email address. Clicking on the link takes them straight to your SaaS product, and it is intuitive to use. Since most users already reset passwords through email, it streamlines the login process.

Users don’t need to manually key in a one-time password, which reduces friction in using your service. You can also use other systems, including SMS, to receive the password.

Magic links work best for products with low login frequency. If you have to sign in every day or multiple times per day, constantly checking your email can become frustrating. But it works well for monthly dashboards or billing portals requiring occasional access.

Pros

• Familiar to most users, with no learning curve
• No need to type anything in, just click on the link
• Easy to implement with existing email systems

Cons

• Depends on email deliverability, with spam folders and filters causing friction
• Vulnerable to compromised inboxes, requires 2FA protection
• Needs a strong fallback for users without email access

Rollout strategy

A good way to bring these in is to offer magic links as an opt-in option alongside existing passwords. Monitor deliverability rates and customer support requests. Consider adding anomaly detection to stop abuse.

Recovery and fallback

Provide alternatives like secondary email or phone verification, if the primary inbox isn’t accessible. Also, encourage users to enable MFA on their email accounts, since it is the point of failure.

One-time passcodes (OTP)

Similar to magic links, one-time passcodes are sent via email or SMS. For better security, send them via an authenticator app. They work well for high-volume SaaS because they're quick and familiar.

Unfortunately, like the old password system, they have security flaws.

Pros

• Familiar to customers thanks to widespread adoption in banking and e-commerce
• Work across devices, with no special hardware required
• Can be layered as step-up authentication, improving your security stack

Cons

• OTPs sent by text message are vulnerable to SIM swap fraud
• Email OTPs are vulnerable to compromised inboxes in the same way magic links are
• Can frustrate users if codes expire too quickly or arrive late

Rollout strategy

Introduce OTPs as a primary or backup login option first. Where possible, test delivery reliability across regions and different carriers. Be aware that SMS OTPs may increase your operational costs, so have a plan for scaling those expenses.

Recovery and fallback

Users change phone numbers and lose access frequently. Offer multiple channels, such as email fallback or an authenticator app. For authenticator apps, provide a way to re-enroll without weakening security, perhaps through identity verification.

Passkeys

Passkeys are becoming more common, and users are getting more used to them. They provide a good mixture of frictionless login and high security for users.

Passkeys use device-based cryptographic pairs. They use face ID, fingerprints, or PINs. No password is required, and because your device only stores part of the authentication code, they are much more secure.

This method is often the answer for SaaS products handling sensitive data. Think healthcare or fintech apps where a security breach can harm your reputation. They also offer robust security that helps to future-proof your authentication process.

Pros

• Strong phishing resistance; there is no code or link to steal
• Seamless UX with existing biometrics on devices
• Backed by Apple, Google, Microsoft, and other tech companies

Cons

• Requires a modern device and browser support
• Rollout can be complex
• Users may need education on setup and recovery
• Some users are resistant to sharing biometric data

Rollout strategy

Begin with a control pilot among your more tech-savvy users. Provide clear in-app education and guidance. You may also want to highlight benefits like faster login. Track adoption metrics before phasing out passwords.

Recovery and fallback

Device loss is the big threat here. Encourage users to sync passkeys across their cloud ecosystem, for example, with Google Password Manager. You can offer fallback methods like OTPs or recovery codes, but they introduce weaknesses into your security. You may need to build customer support processes to handle identity verification when devices are lost.

Comparing the options

The right solution for a passwordless future

Every authentication method has its own pros and cons. Magic links are great for casual, low-volume SaaS apps, while OTPs combine familiarity with moderate security. Passkeys, meanwhile, offer the long-term standard and the best protection against phishing.

The key is to match the UX experience your users need while planning for fallback and recovery. Done right, these authentication methods can boost user trust and keep sensitive data secure for your SaaS products.

*** This is a Security Bloggers Network syndicated blog from MojoAuth - Advanced Authentication & Identity Solutions authored by MojoAuth - Advanced Authentication & Identity Solutions. Read the original post at: https://mojoauth.com/blog/passwordless-authentication-saas-options