What is Passwordless Multi-Factor Authentication?

18 August 2025

Since the early days of the internet, passwords have been the go-to method for logging in. But today, they’re more of a liability than a security measure.
As a result, businesses - especially in high-risk, high-trust sectors like banking and the wider fintech industry - are moving toward passwordless multi-factor authentication (MFA). This approach offers stronger security and a better experience for users.
In this blog, we’ll break down what passwordless MFA actually means, how it works, and why it’s becoming the new standard for authentication.

What Is Passwordless Authentication?

Passwordless authentication is verifying a user’s identity without asking them to enter a password or PIN.
Common methods include:
  • Biometrics (face or fingerprint).
  • Passkeys (cryptographic credentials stored on a device).
  • Push notifications (tap to approve).
  • Magic links or SMS OTPs (single-use codes or links).
  • Device binding (checking that the login is coming from a previously verified device).
These methods remove the need to remember or reset complex passwords and help block phishing, credential stuffing, and SIM-swap attacks.

How Does MFA Work?

Multi-factor authentication (MFA) means using more than one way to confirm who a user is. The standard factors are:
  • Something you know – like a password or PIN.
  • Something you have – like a phone or security token.
  • Something you are – like a biometric trait.
Traditionally, MFA has meant combining a password (something you know) with a device (something you have). This has helped strengthen login security across industries.
In Europe, the Strong Customer Authentication (SCA) regulation under PSD2 mandates the use of MFA for banking transactions, requiring at least two of the above factors.

So, What Is Passwordless MFA?

Passwordless MFA removes the “something you know” factor and instead relies on a combination of “something you are” and “something you have.”
For example:
  • A user opens a banking app using facial recognition (something they are) on a registered phone (something they have).
  • There’s no password involved, but two strong factors are still verified.
This approach removes the weakest element (passwords) while keeping the layered protection that MFA is designed to deliver.

Why Are Businesses Moving to Passwordless MFA?

1. It’s More Secure

Passwords are easily guessed, stolen, or phished. Passwordless MFA removes this weak link by using phishing-resistant factors like biometric data and device possession.
According to Verizon’s DBIR, over 80% of breaches involve stolen or weak passwords.

2. It Improves User Experience

Typing passwords, especially on mobile, is slow and frustrating. Passwordless MFA often requires just a glance at the camera or a tap, making logins faster and smoother.

3. It Lowers Operational Costs

Password resets clog up support desks. With passwordless authentication, those calls go away, freeing up time and budget.

4. It Helps with Compliance

In the EU, SCA under PSD2 and the upcoming PSD3 require businesses to apply MFA that’s both strong and privacy-preserving. Passwordless MFA with biometric identity checks meets this bar.

Understanding the MFA Factor Model

To meet MFA requirements, while being passwordless, you still need two different factors from the three categories.
Let’s look at some examples to clarify which methods qualify as true passwordless MFA.

Where Does Keyless Fit In?

Keyless is the only platform that verifies both a user’s face and device during authentication. This is a true passwordless MFA solution designed for regulated industries.
Keyless combines:

A simple example:

A customer signs up to a banking app. They pass a KYC check and register their face and device.
Later, when they log in again:
  • Keyless checks that the face is the same.
  • Keyless checks that the device is the same.
No passwords. No OTPs. No fallback to weak credentials.

When Should You Use Passwordless MFA?

Passwordless MFA is especially important in situations where both security and trust are critical:
You should also consider passwordless MFA for:

Final Thoughts: The Future is Passwordless

Passwords are no longer a reliable way to protect user identities. Businesses are rapidly moving toward passwordless MFA, because it’s more secure, simpler for users, and better aligned with modern compliance frameworks.
At Keyless, we believe authentication should be private, secure, and effortless. That’s what passwordless MFA makes possible.
Ready to upgrade your authentication?Discover how Keyless can help you roll out secure, passwordless MFA across your organisation, without compromising privacy or performance.
Request your 3-minute on-demand personalised demo today.
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