MQ didn't have built-in user ID and password functionality prior to V8. If you use MQCSP to deliver your user ID and password to the queue manager to check (which is what the API key in MQ on Cloud uses) and both ends of the client-server-connection channel are at V8 and above, then the password will not be sent in the clear.
See page 14 of MQTC Presentation: MQ Connection Authentication
If you're running MQ Explorer, be aware that to use MQCSP to deliver the user id and password you must ensure that compatibility mode is OFF.
See Pages 11-12 in the above presentation.
I believe in the most recent versions of MQ Explorer the default has now flipped away from compatibility mode.