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If you’ve spent any time researching e-signature technology, you’ve probably heard about a lot of different types of e-signatures. The term “electronic signature” (often shortened to “e-signature”) is a blanket term that describes any technology that lets you sign a document online, but there are many sub-categories. 

In this post, we’ll tell you a little bit about the differences between electronic signatures and a specific type of e-signature technology called a “digital signature.” 

Electronic Signatures

Electronic signatures have become popular because they allow users to sign documents on the web with a simple click of the mouse. In some products, users can even scan images of their signature or use their fingers to trace their handwritten signatures onto a document. 

The simplicity of this signing process, combined with the fact that no software or hardware is required, has drawn significant interest to the technology for its potential to speed up workflows with less cost.

Unfortunately, there are no universal standards for electronic signatures. The technologies to protect a document once it has been signed vary widely, and the legal evidence to support each document is usually stored on the vendor’s server instead of within the document.

This can be problematic if a document is challenged in court in the future, raising questions like:

  • How do I know the service provider will be around in the future when I need to prove the signature in court?
  • What assurance do I have that the service provider will not charge an outrageous fee when I go to court and I need the service provider to turn over records and testify about how the service worked?

This presents a huge risk for businesses that deal with high-value transactions.

In fact, Forrester Research suggests that a good stress test to evaluate e-signature vendors is to imagine that the vendor disappears and see what evidence you have to support you in court. With most electronic signature vendors, that evidence is sparse at best if the vendor disappeared. 

Digital Signatures

Digital signatures are fundamentally different than other types of electronic signatures. It is a type of electronic signature, but not all electronic signatures have the security features of a digital signature.

Digital signature technology has been used for decades, which means it is highly standardized and accepted. A digital signature essentially links a “fingerprint” of the document at the time of signing with an identity credential (a digital certificate), and the result is permanently embedded into the document.

 

A digital signature proves no fraud or tampering has taken place. The signature also identifies the signer and can provide other information about the time of signature, which provides significant legal evidence in the event that a document is challenged in court (a feature called “non-repudiation”). 

Because digital signatures are based on industry and international standards, signed documents contain all of the evidence you’d need to prove its authenticity. This means you don’t have to rely on a vendor to give you evidence in the future. Digital signatures are also more widely accepted internationally than electronic signatures.

These security features make digital signatures the right choice for businesses in highly regulated industries and companies that deal with high volume and high value transactions. Learn more about e-signature security by downloading our free eBook, "8 Rules for E-Signature Security."

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