Websites currently protect payment information by encrypting the data before transmitting it. Two major protocols accomplish this encryption: SSL (Secure Sockets Layer) and TLS (Transport Layer Security). These protocols are used for services such as credit card processing, direct banking, and PayPal.
PayPal holds a global market share of about 43% in the payment service sector, with 435 million active user accounts as of 2023. In 2022, it generated a net revenue of 27.5 billion USD. Therefore, there is a high interest in offering not only one of the most convenient payment methods but also one of the most secure ones.
In late 2022, PayPal took its first steps in the USA to introduce Passkey. As of this week, it is also available in Germany and other European countries.
Passkey is a new login method that enables users to log in to a service without entering their passwords. Essentially, a Passkey is a cryptographic element that replaces a password but cannot be read or entered by the user. This also makes it impossible for hackers to guess or phish the login credentials required.
Each Passkey consists of a cryptographic key pair combined with biometric features, a PIN, or a pattern. The public key is stored with the service provider, in this case, Paypal. The second key is private and stored only on the user's device, such as a smartphone. Since it never leaves the device, it cannot be compromised in the event of a data breach with the service provider. Login is only possible by matching the two keys, which are mathematically related to each other.
"The Passkeys developed by the FIDO Alliance and the World Wide Web Consortium represent a modern security standard that solves some of the biggest security issues on the internet caused by the weakness of password authentication," the company explains.
According to the company, users can now set up a passkey for PayPal on Apple devices running iOS 16, iPadOS 16.1, or macOS Ventura. To do so, simply log in to the payment service's web portal using Safari and select the "Create Passkey" option. You will then be prompted to enter your existing login credentials and authenticate using either Face ID or Touch ID.
For Android users, a passkey can also be created starting with version 9 of the Google operating system. In this case, we recommend logging in to the PayPal website via the Chrome browser and selecting the "Create Passkey" option. Once you have done this, you will be asked to authenticate in the same way you normally unlock your device. Once you've created a passkey, you can use it as your primary login method to access your PayPal account.
One major step towards increased payment security for brands and customers.
*Statista 2023
