Where exactly is the issue with the password?

When logging in to the Square Enix Account Management site, or when logging in to the game via the PlayOnline Viewer?

A very common issue with the PlayOnline Viewer part is that the PlayOnline password has not been set to be remembered in the PlayOnline Viewer user settings. Without doing so, the viewer will ask for the PlayOnline password, and logging in with just that does not work.

With the PlayOnline password saved into the PlayOnline Viewer user settings, the Square Enix account password is used to actually log in.