To configure SMTP authentication in Microsoft Exchange for any third-party application:

In the Exchange admin center, navigate to mail flow.
Click ‘New’ to add a new send connector
Select the send connector that you created and click the Edit icon.
On the delivery tab, select Basic Authentication.
Make sure that Offer basic authentication only after starting TLS is not selected. The SMTP Receiver does not support authentication over TLS. However, if the mail server uses a TLS connection to connect to the SMTP Receiver, there is no need to encrypt the authentication.
Enter the user ID and password that you defined in the third-party application