When Wallaby Financial launches a new version of its app, which helps users maximize rewards and points, later this summer, it will be missing one notable feature: a password.\u00a0"We'll authenticate their email address or their phone number," says Matthew Goldman, CEO of Wallaby Financial. "We're going to send them a one-time code to either of those locations, and they'll have to enter that back in the system. You have to prove that you have control of that phone number or email address in order to log into our system."\u00a0[ ALSO ON CSO: What I learned from resetting over 300 passwords ]Then, he says, if the user stays logged in, his phone's authentication system will stand in place of entering a password into the app every single time.\u00a0Wallaby Financial is one of many groups trying to get rid of passwords all together. In June, the blogging site Medium ditched passwords, too.\u00a0The big reason?\u00a0 Passwords don't really work.\u00a0The password problem"The problem with passwords is most people are very bad at remembering them," says Goldman. "They have too many of them and so they resort to fundamentally insecure behavior in order to deal with the problem of remembering lots of passwords."\u00a0According to a survey by Telesign, a mobile identity company, 73 percent of online accounts use duplicate passwords, 54 percent of consumers use five or fewer passwords across their entire life online, 22 percent use three or fewer, and 47 percent haven't changed their password in five years.\u00a0"We know it\u2019s bad because if one system is hacked, all of your profiles across many systems become vulnerable," says Goldman.\u00a0Before our lives moved online, passwords worked. "It was designed in a world where there were maybe three logins in your life," says Boris Jabes, co-founder of Meldium, a password and account manager. "No one I think planned on it becoming how you'd log into 100 plus places in a year or a month."\u00a0Passwords aren't just a hassle for website users \u2013 it's a hassle for developers, too.\u00a0\u00a0"If I'm a corporation, if I'm a website, then I have to build all the infrastructure to manage your password, store them correctly, allow people to forget them," says Jabes. And even that's not perfect. "The whole infrastructure around that is vulnerable. Either people will have weak ones or you will store them poorly and you will become a vector of attack," he says.\u00a0Password alternatives nowThe password alternative being tested out right now is exactly what Wallaby Financial is doing: two-step authentication, relying on the smartphone \u2013 and the fact that most people have it with them at all times.\u00a0"We do see mobile being very key to helping solving this problem," says David Rockvam, senior vice president and general manager of Entrust Certificate Servces at Entrust Datacard. "People want to carry them. You don't have that issue of making them carry around something extra."\u00a0Consumers trust their phones, too, so the near-ubiquitous handhelds are becoming "a trusted platform for multipurpose ID," Rockvam added. "When you put all that together, we really think the phone or smartphone is actually going to be something you can utilize to drive stronger identity, hence moving away from passwords"\u00a0Another trend: letting another group do the authentication for you. By the end of this year, Wallaby Financial will allow customers to login through Google.\u00a0"Seventy percent of our users are already signing in with a Gmail address," says Goldman. "On Android phones it's already built in. Ultimately that's more security than using some terrible password like \u2018dog5.\u2019"\u00a0Medium, the blogging site, lets users log in with Twitter, Facebook or an email address.\u00a0Password alternatives down the roadRockvam sees third-factor authentication becoming an important part of security in the future, too: things like biometrics with touch ID \u2013 which Apple already uses \u2013 and retinal scans.\u00a0But Meldium\u2019s Jabes still doesn't see those kinds of systems as a silver bullet that replaces passwords entirely.\u00a0"The reason you haven't seen a solution magically appear is it has to be better for users," he says. "I can remove passwords and give you a phone-based login but is that even going to get one tip of the registrations to my website? Users are going to be more confused."\u00a0He adds that while startup companies are presenting possible solutions, he doesn't see the industry making a total shift away from passwords until a giant like Apple, Microsoft, Facebook or Google comes up with a solution.\u00a0"I hate to say this because I'm someone who comes from the startup world," he says. "I think this is one of those where a major player has to do something in order for real change to occur."