What is an E-Signature?

An e-signature, or electronic signature, is any digital process that demonstrates agreement to a document or transaction. In simple terms, it’s the digital equivalent of a handwritten signature, allowing individuals and businesses to sign documents electronically from anywhere in the world.

Digital Signature vs. Electronic Signature

Although they can be used interchangeably, these two terms have distinct meanings. An electronic signature is the broader umbrella term. It can be something as simple as ticking a box on a page or drawing your signature on a touchscreen. Like a handwritten signature, this digital fingerprint serves as a form of approval and is legally recognized in many jurisdictions.

A digital signature, on the other hand, is a specific type of electronic signature that uses encryption and certificate-based technology to verify the identity of the signer and ensure no tampering has occurred. It adds an extra layer of security and is commonly used for critical and legally binding documents.

What are the benefits of using electronic signatures?

Apart from convenience, electronic signatures provide users with numerous advantages, such as:

• Remote Accessibility: An electronic signature allows signing from any location, provided internet access is available. 
• Speed and Efficiency: Documents can be signed and returned within minutes, cutting out the need for time-consuming back-and-forth communication, whether via email or physical delivery. 
• Cost Reduction: Eliminates printing, mailing, and storage costs associated with paper documents.
• Environmental Impact: By minimizing the need for printing, it also reduces paper consumption and carbon footprint.
• Audit Trail: Automatically creates detailed records of the signing process, so tracking is easier.  
• Security and Compliance: Advanced e-signature solutions offer robust authentication and encryption, which also helps meet legal requirements and standards. 

Types of Electronic Signatures

Electronic signatures generally fall into three main types based on security level:

• Simple Electronic Signatures (SES): The most basic type among the three, SES, is used when security and confirmation of the signer’s identity are not a priority. Examples include typed names, scanned signatures, or simply clicking an “I agree” button.
• Advanced Electronic Signatures (AES): An AES requires the signer to provide proof of identity when they sign the document. This could be any photo that confirms their identity, such as a passport, identity card, or driver’s license. These signatures are uniquely linked to the signer and can detect any changes to the document.
• Qualified Electronic Signatures (QES): QES is significantly stricter than the first two and requires the signer to use a qualified device, such as a mobile app or a smart card, to generate a one-time passcode. These represent the highest level of security and authentication when it comes to electronic signatures.

Legal Validity

Electronic signatures are now widely recognized as a legal alternative to their ink-and-paper counterparts. In the U.S., they hold the same legal validity as handwritten signatures under the ESIGN Act. Enacted in 2000, this law supports the use of electronic records and signatures in interstate and international commerce. Additionally, they are admissible in a court of law as long as they comply with the rules of evidence.