Honest communication between potential partners with conflicting interests is generally thought to require costly signals. Costly signalling can explain partner choice when it is possible to link a strategic cost to an individual's quality, like in mate choice. However, in mutualisms, it is usually impossible to link a cost to the likelihood that a potential partner will behave cooperatively in the future. In fact, signals like Nod factors in rhizobial bacteria, which form symbioses with leguminous plants, are evidence of cost-free, honest signals in situations of potential conflict. How can such a signalling system evolve? We use a population-genetics model to show that a cost-free, honest signal can evolve when the receiver is under soft selection, which is when high juvenile mortality does not lead to a corresponding reduction in fitness, a common occurrence in many species. Under soft selection, senders evolve increasingly complex messages of identity, a system akin to a password or a lock and key. Thus, a symbiont can signal that it shares a coevolutionary history with a potential host, and if that history is mutualistic, then the host can believe that the symbiont is mutualistic. Password signalling might also explain the acquisition of some defensive symbionts and the evolution of complex species-recognition signals in mate choice.