Microsoft Authenticator's Password Exit Exposes Fragmented Passkey Future

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For months, Microsoft has sounded alarms about an August 1 deadline: the end of password management in its Authenticator app. Warnings evoked memories of Y2K-level urgency, but the real story isn't just about passwords—it's about Microsoft's struggle to deliver a cohesive vision for the passkey revolution it aggressively champions.

The Great Credential Migration

As of June, users could no longer add passwords to Authenticator. Now, saved passwords vanish entirely, forcing a migration to Microsoft Edge. Edge handles password storage, autofill, and synchronization across Windows, macOS, iOS, Android, and Linux—mirroring Google's Chromium-based approach in Chrome. This consolidation makes sense: browsers offer broader platform coverage than a mobile app. But the transition reveals a glaring omission in Microsoft's strategy.

"Passkeys created for services like PayPal and eBay are stored as device-bound credentials in Windows and can be accessed via Windows Settings > Accounts > Passkeys. These are not stored or synced in Edge." — Microsoft Spokesperson

The Sync Problem Plaguing Passkeys

Passkeys promise stronger security—resistant to phishing, guessing, and reuse. Yet Microsoft currently supports only device-bound (non-syncable) passkeys via Edge on Windows. These credentials tether to hardware like a Trusted Platform Module (TPM), making them inaccessible on other devices. Tests confirm Edge on Android can't register or sync passkeys, fracturing user experience. Imagine managing separate passkeys for each device—an untenable step backward from password syncing.

Confusion deepened when Microsoft stated Authenticator would "continue to support passkeys." However, clarification reveals this applies solely to Microsoft Entra ID (formerly Azure AD) business users, not general consumers. Even there, passkeys remain device-bound and non-syncable.

Why This Stalls the Passwordless Future

Microsoft's aggressive passkey advocacy clashes with its fragmented execution:
- Developer Impact: Apps targeting cross-platform users face inconsistent authentication flows, complicating adoption.
- Security Risks: Users may revert to passwords or insecure workarounds due to sync limitations.
- Competitive Disadvantage: Chrome already syncs passkeys across devices, while password managers like 1Password and Bitwarden offer unified solutions.

Microsoft’s identity ecosystem—Windows Hello, Edge, Authenticator, Entra ID—resembles a chessboard mid-game. Moving these pieces into harmony is complex, but the absence of syncable passkeys undermines the company's passwordless narrative. The logical endgame is full Edge integration, mirroring its password handling. Until then, users must weigh third-party managers or tolerate device-bound constraints.

As the industry races toward passwordless simplicity, Microsoft’s credential management paradox serves as a stark reminder: even tech giants must align their infrastructure with their vision. The clock is ticking louder than any Y2K alarm.

Source: David Berlind, ZDNet