Unless you’ve been living under a rock, you’ve most likely encountered digital or eSignatures. It might have been when you purchased a new home, signed up for a new service, or accepted a job offer. eSignatures have permeated every aspect of business, and the market is expected to grow by more than 30 percent annually, so we can expect to see eSignatures sticking around for the foreseeable future.
And while you’ve almost certainly signed your name in a digital format, not every experience is the same, or even referred to by the same name. There are three commonly-accepted forms of signatures—wet signature, eSignature and digital signature—and distinguishing between them can get confusing. The main differentiating factor between all forms of signatures deals with the amount of trust that is attached to each. Let’s explore what that means by defining the three forms of signatures.
Wet signatures are created when a person physically signs a document, either with a stylized, cursive name or a name seal. In all cases, the “wet” implies the signature was made with ink or wax and therefore needs time to dry. Companies who still use this format are forced to print and scan contracts and other signed documents in order to share them digitally. Without any sort of digital footprint or electronic encryption, it’s nearly impossible to properly trace or vet wet signatures, placing them lowest on the trust totem pole when it comes to the security or verification of a signature or deal.
There are various legal definitions for electronic signatures, but in general, eSignature refers to the acknowledgement or adoption of an electronic message, transaction or document. This can be anything from simply typing a name on an electronic form or clicking “agree” or “disagree” on an electronic terms and conditions contract, to a handwritten but digitally-captured signature on a touch device, like a tablet or smartphone (also known as a “dynamic signature”). eSignatures are typically a quicker process, and therefore more business-friendly. And while they don’t require jumping through as many hoops as digital signatures, as you’ll read below, eSignatures are still far more secure than wet signatures in that they still capture IP addresses of the signers, as well as the physical location of the signature.
Digital signatures contain an algorithm that encrypt the signature to create a unique certificate. This process encrypts documents with invisible codes that essentially make it impossible to duplicate or tamper with the document or its signatures. Parties on either side will be able to detect if the document was altered or changed in any way that would invalidate it. These extra steps and levels of encryption make digital signatures more secure than both eSignatures and wet signatures, but most companies, especially in the B2B world, don’t require this level of security to conduct business.
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