You may have noticed that the terms "electronic signature" and "digital signature" are often used interchangeably. Still, there is a difference between the two. A digital signature is always electronic, but an electronic signature is not always digital.
What is an electronic signature?
An electronic signature is a broad term that refers to any electronic process that indicates acceptance of an agreement or a document by a signer.
The electronic signature can include a variety of methods such as:
Typed signatures:- Simply type your name at the end of the document or at a location specified.
Scanned signatures:- Scanning a handwritten signature and inserting it into an electronic document such as a word (docx), text (txt), or PDF file.
Click-to-sign:- Clicking a button to indicate agreement is often seen in online forms and terms of service agreements.
Stylus or Finger signatures:- Using a stylus or finger on a touchscreen device to draw a signature.
What is a digital signature?
On the other hand, a digital signature is a type of electronic signature that uses cryptographic methods to provide an enhanced level of security. A pair of cryptographic keys is needed for Public Key Infrastructure (PKI), which is used to generate and verify digital signatures. a public key for verification and a private key for creating the signature.
Here are some key characteristics of digital signatures:
Authentication:- It confirms the signer's identity and makes sure the signature belongs to the identified person.
Non-repudiation:- Provides proof of the origin and integrity of the signed document, preventing the signer from denying their signature.
Integrity:- Ensures that the document has not been altered once it has been signed.
Key Differences Between Digital Signatures and Electronic Signatures
Electronic Signature | Digital Signature |
An electronic signature is a digital form of a wet-link signature that is legally binding and secure. | A Digital signature is a secured signature that works with an electronic signature and relies on public key infrastructure. |
Verification can be simple, often relying on the context of use (e.g. email confirmation, IP address tracking). | Verification involves cryptographic validation processes, ensuring that the signature is legitimate and the document has not been tampered with. |
Easy to implement with minimal technical requirements. They can be created using various software tools and platforms. | Require more sophisticated infrastructure, including digital certificates issued by trusted Certificate Authorities (CAs) and specialized software for creating and verifying signatures. |
It is simple to use, but it has a lesser level of evidential value. | It is generally preferred because of its authenticity. |
Advantages of digital signatures over electronic signatures
Enhanced Security:- A digital signature consists of various security features and is less prone to tampering.
Legal Validity:- Digital signatures are legally recognized in many countries, providing greater assurance and validity to signed documents.
Non-repudiation: Digital signatures provide non-repudiation, meaning the signer cannot deny their signature.
Time-stamping: Digital signatures can include a time-stamp, providing a record of the date and time of signing.
Choosing the Right Solution
Depending on your unique requirements and the type of transactions you do, you can choose between digital and electronic signatures.
Below are some things to think about before selecting the best course of action.
Risk Level:- Digital signatures provide the necessary security and compliance for high-risk transactions, such as those involving financial or legal documents. Electronic signatures could be sufficient in low-risk scenarios.
Regulatory Requirements:- Make sure the approach you have selected complies with all applicable laws and regulations in your jurisdiction.
Budget:- Consider the cost implications of implementing any solution, balancing the need for security with your budget. OpenSign is the most popular free and open-source digital signature tool available in the market and is the only free digital signature tool that offers unlimited free digital signs even on the basic plan which comes at no cost.
Electronic signatures and digital signatures perform different functions, so it isn’t a case of deciding which one is best. Instead, businesses should consider what level of security and integrity they want to achieve when agreeing on contracts online, and whether they need both.
If you’re looking for a simple way to add signature agreements, most electronic signature software will be sufficient.
But if you want to enhance the security of your contracts and reduce the risk of forgery and tampering, you’ll likely want to strengthen your electronic signature functionality by adding a digital signature too.
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