A new study from the FIDO Alliance highlights a significant shift in consumer behaviour as frustrations with passwords drive younger customers away from brands. The study, part of FIDO Alliance’s fourth annual Online Authentication Barometer, underscores the growing demand for seamless, secure alternatives like passkeys, as both younger and tech-savvy consumers increasingly abandon brands that rely on traditional password-based logins.
The report reveals that consumer familiarity with passkeys—a passwordless login method using biometrics or device-based authentication—has surged by 50% since 2022, now at 57% in 2024. This rise is mirrored by a shift in behaviour: 62% of consumers who are aware of passkeys are actively choosing them to secure their accounts. In contrast, the number of times users manually enter passwords each day is steadily dropping, a trend that spells trouble for brands clinging to outdated security methods.
Brands Losing Sales Due to ‘Password Pain,’ Especially Among Young Customers
For brands and businesses, the consequences of sticking to passwords are becoming increasingly clear. According to FIDO Alliance’s data, password-related frustrations are now a major factor in lost sales, especially among younger customers. Nearly half (42%) of consumers report abandoning an online purchase within the past month due to forgotten passwords, with this figure climbing to 50% among 25- to 34-year-olds. Younger generations also lead in their preference for passwordless options, indicating that brands must adapt quickly to retain this tech-savvy demographic.
Older generations appear more reluctant to adopt new login methods, but they also report abandoning services due to password-related issues. Over half of those under 35 admitted to giving up on a service due to a forgotten password, highlighting that password fatigue is no longer solely a young person’s issue—it’s a widespread trend. FIDO Alliance’s CEO, Andrew Shikiar, stresses that brands should take this data as a “call to action” to meet shifting consumer expectations.
Online Threats Escalate: Consumers Report More AI-Driven Scams
The FIDO Alliance study also sheds light on rising security concerns, revealing that many consumers feel increasingly vulnerable to online scams. The advent of AI-enhanced attacks has led to more sophisticated and convincing phishing attempts, which were noticed by 53% of consumers. Younger users, particularly those aged 18-34, reported seeing a notable uptick in suspicious messages and scams, while older demographics were more uncertain about AI’s role in these threats. The report underscores that brands could better support users by educating them on digital security and adapting to newer, safer authentication options like passkeys.
Passkeys at a Turning Point
The report’s findings suggest that passkeys are not only familiar to many consumers but are also seeing rapid adoption in digitally advanced countries. Nations like China and India have led the way, with passkey enablement rates at 80% and 73%, respectively. The UK follows closely at 66% adoption, indicating a clear readiness among consumers for passwordless alternatives.
While passkeys have gained a foothold, Andrew Shikiar notes that many top global brands are already supporting the technology, yet others lag behind. “Consumer expectations are changing,” Shikiar warns, “and the pace of passkey deployment and usage is set to accelerate even more in the next twelve months.”
The FIDO Alliance study makes it clear: Brands that fail to adopt passwordless options could risk customer loyalty and sales in a digital landscape where consumers increasingly demand security and simplicity. As passkeys gain traction, businesses that embrace these technologies may secure a competitive edge in an era of rising digital expectations and mounting online threats.
