Not All Electronic Signatures Are Created Equal

There are traditional signatures (with pen and paper) and electronic signatures, right? Those are my two options? Wrong. There are actually several different types of electronic signatures. One of the most important distinctions is between “wet” (handwritten) electronic signatures and digital electronic signatures.

Definitions
It may help to begin with some definitions.

• Wet (handwritten) electronic signature: a graphical representation of an ink-to-paper signature or simply actual handwritten signature on electronic media.

• Digital electronic signature: a digital “fingerprint” that is unique to the signer and the electronic document.

Handwritten Electronic Signatures
Each time I purchase a prescription at my local pharmacy, I have to sign a little screen with a stylus to indicate that I have been offered counseling by the pharmacist. Oftentimes, when we make a purchase with our credit card, we must sign in a similar way. These are excellent examples of handwritten electronic signatures.

There’s a certain comfort level that goes along with a handwritten electronic signature. It’s created with a device very similar to a pen called a stylus. It looks like a traditional signature. And there are definitely situations where handwritten electronic signatures are appropriate, which explains why many electronic signature solutions allow for this particular type of electronic signature.

“Our eSign Dashboard offers a wet signature solution,” explains Mehrdad Alaei, CEO of GoPaperless. “We also refer to it as a ‘biometric’ method. It’s important for agents and consumers to understand that, even with handwritten electronic signatures, it is a secure and encrypted process. When they understand the security, and they enjoy the similarity to ink-and-paper signatures, they feel very comfortable with the biometric signature option.”

Digital Electronic Signatures
Digital signatures are click-to-sign, instead of signed using a stylus. While the biometric method is great for in-person signing, digital signatures are an excellent option when agents can’t meet clients face-to-face. In fact, a digital signature can be taken anywhere, as long as the signer has Internet access.

Here’s how it works. The signer logs on to a secure website and clicks to indicate their signature. Mr. Alaei explains, “This all takes place in a structured online setting. Before they sign the document, the signer must complete a series of steps to verify their identity. We establish who the signer is and confirm their intent to sign the document.”

Whether they’re biometric or digital, electronic signatures are legal in the United States and are accepted by most institutions. Should you run into one of the few institutions that will not accept electronic signatures, you can read our recent article, “The Bank Rejected My E-signed Document! What Can I Do Now?”, for advice on how to proceed.