Secure communication networks enabled by commercial quantum key distribution (QKD) are already available. However, their widespread deployment will require great efforts towards reducing the currently prohibitive cost of QKD systems. Here, we propose a compact and cost-effective alternative to the asymmetric Mach-Zehnder interferometer commonly used to implement phase encoding in the Bennett-Brassard 1984 (BB84) QKD protocol. Our solution consists of an all-fiber, in-line, highly birefringent interferometer (HBI). The HBI shows improved tolerance to length mismatches and a simpler assembly, making it particularly desirable for the fabrication of multi-user systems where several interferometers must have matched delays and where cost and space considerations can be most critical, such as quantum access networks. As a proof-of-principle, we demonstrate point-to-point QKD operation with HBIs over 15.5 km drop fiber and an 8-port passive optical network splitter. We achieve a secure key generation rate of 299.4 ± 16.4 kbit/s with a quantum bit error rate of 2.89 ± 0.31% for a continuous 25 h operation period.

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