Difference between Electronic Signatures and Digital SignaturesDownload Now: FREE GST 2023 GuidebookDownload Now: FREE Employment Pass ChecklistDownload Now: Free Incorporation Checklist
Most users consider electronic signatures and digital signatures to be synonyms. However, there is a significant difference between electronic signatures and digital signatures.
What is the Purpose of Signatures
A signature depicts your name and proves your identity and intent. Traditionally, a signature uniquely identifies a person, confirms physical evidence, and consents to a document. The primary purpose of a signature is to indicate that a person has seen a document and they acknowledge and agree to the contents.
Types of Signatures
- Wet Signature
Wet signatures refer to the pen on a paper signature. No digital means is involved. This is the most popular type of signature recognised in jurisdictions worldwide. Often, it is the name or initials of a person's name. However, it can also include seals and symbols.
- Electronic Signature
Electronic signature is associated with other data in electronic form such as an electronic document. It proves the authenticity of a document through signing—an electronic signature functions by use of software programs like UsefulPDF. Electronic signatures are popular but not legally binding in every jurisdiction. It is essential to know the applicable laws in their use.
- Digital Signature
Digital signatures are a way to prove a document's authenticity. They are used to verify that the person who signed a document is the same person who digitally signed it. They utilise PKI (Public Key Infrastructure) for data encryption. A certified digital certificate authority maintains the PKI, and the signer needs a digital certificate with limited validity. Public and private keys will use together to encrypt the signature. If the keys don’t match, then the signature is invalidated.
- Clickwrap Signatures
Clickwrap signatures are exclusive to online commerce and are legally binding for all intent and practices contained. The user ticks a box to show they accept the terms and conditions of a website or sale before they consume.
What are the Differences between E-Signatures and Digital Signatures
How do Electronic Signatures Work?
An electronic signature is data that the signatory of document inputs electronically to verify the authenticity of someone's identity and acceptance of the document's content.
When signers intend to sign a document or record, it uses electronic authentication techniques to justify the signer's identity, such as email, face scan, fingerprint biometrics, etc. Some may enhance security by implementing multifactor authentication.
How do I Get an Electronic Signature?
Getting an electronic signature can be fast and easy, but the process might vary depending on the software or app you choose to use.
Generally, you can create an electronic signature through relevant software or app downloaded on a phone, computer, tablet, or similar electronic device. Type your name into a designated box, which converts the typed text into a signature for approval. Alternatively, you can upload an image of your signature. Some programs allow you to use your finger to “draw” their signature on the screen using smart writing technology that converts hand movements into digital signals.
You must then confirm your identity by providing some way to verify who you are (either by logging in using their email address or social media credentials). Finally, you must agree to and accept terms and conditions relating to how you intend to use the electronic signature.
Pros of Electronic Signatures
- Eliminates the need to print, scan and mail documents; Streamline business operations. Electronic signatures help you send out documents and have them signed in minutes, thus saving you time for work that is more valuable. It also saves you from printing and mailing costs.
- Time stamped; most reliable ways to prove that a document was signed when it should have. Most electronic signature solutions record the exact time and date of the signature.
- Searchable; Unlike physical documents, you can search and monitor all your documents in one place.
Cons of Electronic Signatures
- Electronic signatures are lower in security as compared to digital signatures. The documents signed are at a higher risk of being compromised if the platforms do not provide encryptions.
- Some knowledge of technology is required. As wet signatures are the default go-to for most people, those without the digital knowledge to operate electronic gadgets will have to learn from scratch.
How do Digital Signatures Work?
Each person will have a unique digital signature, similar to wet signatures. Simply put, a digital signature combines the document and the signer's private key.
The process involves using a PKI protocol, creating two sets of numbers called the public and private keys. To digitally sign the document, the signer will need both of these keys, of which the signer will keep the private key and share the public key to the other party.
When the document is shared, the hash algorithm will run the document through, creating a unique set of numbers and letters known as the digest that will encrypt to the signer's private key, which produces the digital signature.
How do I Get a Digital Signature?
To digitally sign a document, one needs a valid digital certificate that has not expired. These certificates have to be authorised by a licensed certificate authority (CA). There are many ways to obtain a digital certificate as the government does not regulate certificate authorities, but third-party licensed private companies do.
Pros of Digital Signatures
- Workflow efficiency; Managing and tracking documents are made easier, with lesser effort and time involved.
- Offers convenience; You use less time and energy, for example, through face access technology for websites or signing documents.
- Security enhanced Digital signatures reduce the risk of duplication or alteration of the document itself.
- Legal validity; provide authenticity and ensure that the signature is verified.
Cons of Digital Signatures
- The use of digital signatures is highly dependent on the technology used to create it.
- Vendors lack a standardised security policy; some offer lower security levels than others.
All digital signatures are electronic, but not all electronic signatures are digital. One of the most common misconceptions is that they are the same. As you probably know, digital and electronic signatures can serve the same purpose but with different levels of security; they are not synonymous. Both are relatively straightforward to implement once you have the right software. In this article, we hope that we've managed to help you decide which type of signature will best suit your particular needs.
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