The connection between OutSystems and SAP relies on sapnco SAP Connector for Microsoft.NET 3.0.x for Windows 64bit (Compiled with .NET Framework 4.0) which is fully documented here. Therefore, it uses the regular username and password in the connection string.
The Exact version of SAP connector can be find in the Platform Server installation checklist.
If you need an alternative authentication mechanism you can find more information here.
Furthermore, this connection assumes that you are using a secure network is, which means it doesn’t use a secure protocol (communication is performed through HTTP).
Adding a secure layer, requires a custom configuration, including on the server side (SAP system). This is present in the documentation in SNC_MODE parameter (SAP .NET Connector, pp 40).
In addition, by default the data transmitted is not encrypted. However, you can configure it on the OnBeforeConnection() callback that you can find more information in this article.
Combining this information with the SAP Extensibility API it is possible to implement an alternative authentication mechanism.
This section provides all the information you need to integrate SAP and OutSystems.