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What’s the Difference Between Electronic and Digital Signatures?

There are some important distinctions between electronic and digital signatures. Here is a guide on the differences and how to choose which one to use.
December 19, 2023

The days of printing hard copy documents and authenticating them with a wet signature are on their way out. Like so many aspects of the business world, the process of certifying and authenticating documents has been digitized. 

While electronic and digital signatures are now the norm, confusion remains on the difference between the two. Though the terms are often used interchangeably, both signatures function quite differently. The main difference? Security. 

With growing concerns over the authentication, validation, and security of digital transactions, it's never been more critical for businesses to understand the difference between electronic and digital signatures. 

What are the features of an electronic signature?

An electronic signature is the digital form of a legally binding, wet ink signature. However, an electronic signature doesn't have to be an actual, digitized signature. It can be an electronic symbol, sound, or image attached to a contract or record where there is an intention to sign documents by the party involved. 

Electronic signatures are often used because they're straightforward to execute. It can be a simple mouse-click in a box, a verbal signature, or any electronic authorization. Most often used in agreements or contracts entered into by two parties, electronic signatures are legally binding, though they do not integrate any coding or digital certificates. Instead, electronic signatures are used mainly to verify the document. 

Of course, as has always been the case with the potential of forging physical signatures — prevalent even in the days of seals and wax imprints — additional security is often required. Thankfully, digitization has given rise to new security, encryption, and verification forms for documents with new cryptographic algorithms. 

What are the features of a digital signature?

A digital signature is a unique element that acts as a singular, digital fingerprint embedded into the document being executed. It acts as a digital certificate that links the signers to the document and cannot be imitated. Digital signatures utilize encryption standards so that authorities can certify the document's authenticity and prevent tampering. A digital signature is the way to go when a document needs to be secured. 

Digital signatures use private and public key infrastructures to validate the authenticity of electronic signatures. These keys are long sets of numbers encrypted into the document, which acts as a secure digital signature. The digital signature is considered invalid if the document is tampered with or changed after execution. 

In the same way a passport validates and identifies a citizen's nationality, so does a digital signature authenticate the identity of the participants and signers of an online transaction.  

What are the differences between a digital signature and electronic signature?

Below we look at the advantages and disadvantages of digital signatures and electronic signatures. 

How do businesses benefit from digital signatures?

It doesn't have to be a headache to upgrade your agreement process to secure, verifiable, digital signatures. Businesses trust the digital signature process because it ensures validation of every document's authenticity and prevents tampering. Best of all, documents can be sent, signed, and secured from the comfort of one's home or office.

Businesses rely on tools like the Notarize platform to execute digital signatures verified by a notary. The platform also provides a complete audit trail of transactions and a centralized repository for executed documents. Trusted by banks, credit unions, law firms, and insurers alike, Notarize simplifies the notarization process while keeping documents safe and secure.The days of printing hard copy documents and authenticating them with a wet signature are on their way out. Like so many aspects of the business world, the process of certifying and authenticating documents has been digitized. 

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