Passkeys vs. Passwords vs. MFA: What’s the Difference?

If you're in charge of your business's IT and security, you've probably heard a lot of new terms lately. First, "multi-factor authentication" (MFA) became a must-have. Now, "passkeys" are being called the next big thing.

It’s confusing. Is a passkey a password? Is it a form of MFA? Do you need both?

Let's clear the air. As your IT partner, we want to simplify these concepts so you can make the best security decisions for your company. Here’s a simple breakdown.

1. The Classic: Passwords (Something You Know)

This is the one we all know and... well, we know it. A password is a secret that only you are supposed to know. You type it in, the server confirms it's the correct secret, and you're in.

• The Problem: Passwords are a terrible security model. They can be guessed, stolen in a data breach, shared, written on a sticky note, or—most commonly—phished. A phished password is when a hacker tricks you into entering your credentials on a fake website. To the hacker, it looks just like the real thing.

2. The First Upgrade: Multi-Factor Authentication (MFA)

Because passwords are so easy to steal, MFA was created to add another layer of security. The "multi-factor" name simply means you have to prove your identity in more than one way.

The standard factors are:

1. Something you KNOW: Your password.
2. Something you HAVE: Your phone (for a 6-digit code or a push notification) or a physical USB key.
3. Something you ARE: Your fingerprint or face.

Traditional MFA combines #1 and #2. You enter your password (what you know), then you're prompted to enter the 6-digit code from your phone (what you have).

• The Benefit: This is a massive security leap. Even if a hacker steals your password, they can't log in without also having your physical phone.
• The Problem: It’s slow and frustrating for users. Hunting for your phone and typing in a code every time you log in adds friction and wastes time.

3. The Evolution: Passkeys (The Best of Both Worlds)

This brings us to passkeys. A passkey is not just a "better password"—it's a complete replacement for the password.

Here’s how it works: A passkey is a cryptographic key pair.

• A Public Key is stored on the website's server.
• A Private Key is stored securely on your device (your phone, computer, or USB key).

When you log in, the server sends a challenge to your device. Your device uses the private key to "sign" the challenge and prove its identity, and you unlock that private key using your device's built-in security—your Face ID, fingerprint, or PIN.

Here is the most important part:

A passkey brilliantly combines 'something you have' (your phone or computer) with 'something you are/know' (your fingerprint, Face ID, or device PIN) into a single, seamless action.

Instead of Password + MFA Code, your entire login is just look at your phone or touch the fingerprint sensor. It is both simpler for the user and dramatically more secure.

Why are passkeys "phishing-proof"?

A passkey's private key is cryptographically bound to the *actual* website. If a hacker builds a perfect clone at "micros0ft-login.com," your device will immediately know it's a fake and refuse to offer the passkey. The user is protected by default. It makes phishing, the #1 cause of business breaches, practically impossible.

The Showdown: A Quick Comparison

What This Means for Your Business

The takeaway is simple: Passwords are a liability. Traditional MFA is a necessary but clunky solution. Passkeys are the future. They are the first technology that makes your security stronger *while also* making life easier for your employees.

The transition to a passwordless company won't happen overnight. It requires careful planning, assessing which of your critical apps support passkeys, and creating new policies for device management and recovery.

You don't have to navigate this shift alone.