Traditional password-based authentication has significant vulnerabilities that can be exploited by cybercriminals. Common issues include weak passwords, password reuse across multiple accounts, and susceptibility to phishing attacks. Users often struggle to remember complex passwords, leading them to opt for weaker options or use the same password across multiple platforms, putting their accounts at greater risk.

Passwordless authentication aims to address these challenges by eliminating the need for users to remember and manage passwords. Instead, it leverages alternative authentication methods, such as biometrics, hardware tokens, and one-time passwords. Email-based OTPs are one such method that not only enhances security but also improves user experience.

Email-based OTPs combine the convenience of using an existing communication channel with the security of a time-sensitive, one-time-use code. Here's why they are considered a safer alternative to traditional passwords:

1. Two-Factor Authentication (2FA) Enabler: Email-based OTPs inherently implement two-factor authentication. Users must possess both their email account (something they have) and the OTP (something they know) to gain access, adding an extra layer of security.

2. Phishing Resistance: Phishing attacks often trick users into revealing their passwords on malicious websites. Email-based OTPs mitigate this risk, as even if an attacker manages to acquire the password, they cannot access the account without the OTP delivered to the genuine user's email.

3. Reduced Credential Theft Impact: In the unfortunate event of a data breach, the stolen passwords would be useless without the corresponding OTPs. This reduces the potential impact of a breach.

4. Temporary and Time-Sensitive: Email-based OTPs are short-lived and expire after a certain time window. This minimizes the window of opportunity for attackers attempting to intercept or use the OTP.

5. Ease of Use: Users are familiar with email communication, making the process of receiving and entering OTPs seamless and intuitive.

6. Adaptive Security: Some email providers implement advanced security features, like detecting unusual logins or requiring additional verification steps, further enhancing account protection.

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Cybersecurity is always a tradeoff and nothing is ever perfect. At FlexPoint we balance security with convenience through the use of passwordless authentication. We do so because our customers are MSPs and expect best in class security measures, but also because our platform is intended to provide a frictionless payment experience for both MSPs and their clients. Utilizing passwordless authentication also means in a worst case scenario where FlexPoint experiences a security incident there are no customer passwords that can be accessed and used by bad actors. At FlexPoint we take security very seriously and are constantly monitoring the evolving realm of digital security and listening to our MSP partners to develop best in class solutions. Learn more how FlexPoint can help secure your payments.