Yahoo on Sunday introduced a new service called "on-demand" passwords, which lets someone log into a Yahoo account using a short password the company texts to their phone, instead of having to remember their own password. The on-demand password option is now available for U.S. users and will be ready for all consumers by the end of the year.

Upon sign in, an on-demand password is texted directly to your mobile phone. Yahoo says ita new authentication option aims to ease anxiety around password memorization and improve security for users.

Yahoo also said Sunday it plans to introduce "end to end encryption" for email this year to boost privacy protection for users concerned about snooping from governments or hackers.

The Internet giant demonstrated new security and safety features for its email service at the South by Southwest festival in Austin, Texas, ramping up efforts to boost privacy since the 2013 revelations about government surveillance.

The new security feature aims to allow non-technical people to use encryption with the click of a button after an initial setup of a few minutes.

Yahoo hopes to have this available by the end of the year.