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When should you use an electronic signature vs. digital signature?

Most people think the terms e-signature and digital signature are interchangeable, but an electronic signature differs from a digital signature in critical ways.

There are differences between e-signature vs. digital signature technologies. A digital signature is a type of...

electronic signature, suitable for doing business in the digital age. All digital signatures are electronic but not all electronic signatures are digital.

Let’s be clear about the distinction. An electronic signature is a legal construct. It indicates agreement with the terms of a contract or acknowledgement of information contained within a business document, such as a receipt or a bill of lading. It has had the same legal standing for identity, authenticity, and non-repudiation as a handwritten signature on a physical document since the e-signature bill passed in October of 2000.

Long before then, though, electronic signatures for business documents were provided by telegraph and wire services -- from 1845 until the 1980s. Then came fax machines and PIN pads. The parties sending and receiving the documents maintained private arrangements for attesting to the identities of the senders and receivers, as well as the integrity of the business document. Biometrics such as retina scans and thumbprints are other kind of electronic signatures.

E-signature vs. digital signature

A digital signature digitizes the legal standing and attestation of an electronic signature. Significantly, a digital signature relies on cryptographic technologies to ensure the authentication, non-repudiation, and integrity of a business document. A digital signature constitutes a system of processes and messages to securely transmit data about the identities of the parties and the contents of the business document. The algorithms, processes, and message stores continuously evolve.

Thus a digital signature is a technical implementation of the underlying legal construct. Digital technologies rather than private arrangements are used to attest to the identities of senders and receivers as well as the integrity of the business document.

Today, digital signature technology is especially useful for e-commerce and digitized contracting, where transactions take place in completely digital forms, without reference to analogue equivalents.

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This was last published in July 2017

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