Ever since the pandemic hit, almost everything shifted online and going by the rate at which technology is booming, you can imagine that in the next few decades, everything will be digitized. Being a part of this digitalized world is quite a privilege and certainly makes our life simple in ways that we didn’t know were possible. Everything, right from college admissions to payments and transactions, can be done online. It’s time-saving and a highly efficient way to get things done. But a lot of these things require us to sign the documents in order to authenticate them. This is where e-signatures step in. In this article, we will learn all about e signatures, their importance, their uses, etc.
What is e-signature?
Let us first understand the term signature. A signature validates any document and is therefore a standard obligation. It is used extensively in business deals, partnerships, contracts, etc. So one can say that the validity of everything mentioned above is due to signatures. But busy schedules can sometimes make it difficult for a person to be physically present in order to sign documents and we all know that couriers take forever to reach us. This is highly ineffective and the delay in finalizing deals and contracts may lead to increased costs or in the worst-case scenario even cancellation of the deal.
All the aforementioned inconveniences led to the use of electronic signatures. E-signatures help a person in signing and validating digital documents. This can be done in a lot of ways. An e-signature is legally binding, highly cost-effective, and extremely efficient. The Indian government is taking steps in order to spread awareness and encourage people to make use of e-signatures. Electronic signatures are regarded as a safer option as opposed to wet ink signatures as e-signatures cannot be forged or tampered with. E-signatures have certain security layers associated with them which need authentication in order to be accessed.
During the pandemic, everything shifted online. People started working from home, schools started teaching from home and business deals were being finalized over a zoom call. This encouraged everyone (from individuals to organizations) to adopt e-signatures. Although it is extremely important to mention that e-signature is an umbrella term and it covers a variety of ways in which you can digitally sign a document. The most common ways of signing digital documents are-
- A scanned or electronic copy of a handwritten signature.
- Standard electronic signature
- Digital signature
Now, we know what you are thinking- Are digital and electronic signatures different? It’s quite possible that you must’ve used these two words interchangeably. We don’t blame you. Most people don’t know that they are actually different.
The difference between digital and electronic signatures
An electronic signature is the digitized version of the wet ink signature. It is legally binding and secure but it does not base itself upon any standards nor does it follow any form of coding. In simple terms, we can say that an electronic signature can be attached to any document to validate it and give consent for the same. But as mentioned above, it does not undergo any formal process of certification by any trusted authority, it cannot be termed as an authorized way of signing any document or contract. Although it is quite convenient, we would still recommend against the use of electronic signatures in matters involving any serious business or legal affairs.
A digital signature, on the other hand, is extremely secure and is certified by trusted authorities. Digital signatures follow encryption standards which help in validating a person’s identity and this encryption is unique for every individual. So one can say that digital signatures are much more authentic than electronic signatures. Since the digital signature is much more secure and undergoes specific standards, you can use it for matters of legal importance or finalizing any business deals.
Uses of e signatures
Nowadays, everyone, from top companies in the world to hospitals, freelancers, and universities is using e-signature. Following are some of the most popular uses of the e signature-
- Recruitment to a firm or admission to the university.
- Nondisclosure agreements or Non compete agreements
- Bank-related documents, tax filings, insurance paperwork, and school forms.
- Purchasing contracts, sales proposals, patents, etc.
Why do you think that so many companies, regardless of their size, are adopting e-signatures? This is due to the fact that e-signatures offer great flexibility. E-signatures come with great ease of use and their legal status makes them reliable and extremely safe. It is great for startups with lesser human resources as it can reduce errors, and the workload of the employees, and eventually speed up the entire process. Most businesses are switching to e-signatures because signing documents digitally is much faster than arranging a conference for the same or sending couriers. Also, storage of digital files is easier and much more efficient than holding onto all that paperwork. It is also beneficial for the environment. Tracking digital documents is also quite easy. The best part is that e-signatures are valid for up to a period of two years. Although you would have to get it renewed after 2 years.
Can e-signatures be used everywhere?
Now since e-signatures are a much more recent concept, they are yet to be used everywhere. In these places, handwritten signatures are preferred. Following are instances where e-signatures are not accepted-
- When a person files for bankruptcy, wet handwritten signatures are to be used.
- Handwritten wills, trust deeds, power of attorney
- Handwritten contracts regarding property and real estate.
Although most countries have adopted e-signatures, there are still a lot of nations that are yet to fully embrace e-signatures. In these countries, wet signatures have much higher validity than e-signatures.