As the world becomes more connected, business is increasingly transacted online—creating a greater need for virtual signatures. People often use the terms electronic signature and digital signature interchangeably, but they’re actually quite different.
An electronic signature (or eSignature) is defined as: an electronic sound, symbol, or process attached to or associated with a contract or other record and adopted by a person with the intent to sign. For more than 20 years, eSignatures have been recognized under US law and are generally granted the same legal weight as handwritten signatures. eSignatures can be executed with the click of a mouse or a few strokes on a touchpad. They’re commonly used for business and personal contracts, employment offers, basic financial transactions, and more.
A digital signature is a more secure form of electronic signature that is backed by a digital certificate, which provides proof of the signer’s identity. Digital signatures are electronically bound to the signed document and include encryption that prevents tampering with both the signature and the document itself. While digital signatures aren’t necessary for most everyday agreements and transactions, they provide an extra layer of security for sensitive documents and highly regulated industries like government, healthcare, and financial services.