Electronic Versus Digital Signature: What’s The Difference?

Many people use both the terms digital signature and electronic signature without understanding the differences between the two. However, it is important to distinguish between these to know when and how to use each term. 

The key difference lies in that an electronic signature shows the signer’s intention to sign, whereas a digital signature protects documents. 

To establish which one is right for your business, we break down the differences for you.

What is an Electronic Signature?

An electronic signature, or e-signature, is easiest to recognise because it has a visual element to it. Essentially taking the place of the written or wet signature you would typically use on documents, it’s the most common online signature method.

We predominantly use it to identify and prove the signer’s identity and intent when signing forms or contracts. You can see it as the electronic version of your wet signature. 

So, when you have to physically sign for a delivery on an iPad or any other digital screen as you would on paper, you will refer to it as an electronic signature. 

You usually create this electronic signature through the use of third-party software like Agreeable. Using Microsoft Azure data centres that are ISO 270001 and GDPR compliant and adheres to all other regulatory requirements, Agreeable ensures that data is stored safely online. 

In 99% of cases, electronic signatures are legally binding. However, there are some outliers.

What is a Digital Signature?

Unlike an electronic signature, there is no visual element to a digital signature, such as a signature scribbled on a screen. Instead, it is more technical and consists of a series of numbers protected by a password. You can almost think of it as a mathematical signature. 

There are a couple of general concerns when signing any document. These include the validity of the signature and ensuring that the document is not tampered with. 

Notaries came into play to help address these issues. And with online signing, digital signatures serve to fulfil that very same role. As you would usually get your documents stamped and approved by a notary, a secure third-party Certificate Authority (CA) will perform the digital signatures verification process. They do this by connecting your identity to a digital certificate. 

Using a set of requirements called Public Key Infrastructure (PKI), a standard format accepted globally, it facilitates the creation of these digital signatures. 

They consist of two keys, one is a ‘private key’ and that only the signer can use to sign documents. The ‘public key’ on the other hand, exists to help validate this signer’s identity.

When will you use this type of signature? Well, you’ve probably used it multiple times already when banking online or submitting tax.

Sometimes referred to as a ‘digital fingerprint”, benefits include that it is verified, trusted, cannot be replicated, and ensures optimal security of sensitive data. 

There are three different classes of digital signatures, indicating the level of security.

The 3 Different Classes of Digital Signatures

Class One

It provides a standard security level, not recommended for high-security documents and ideal for industries with a lower data risk. 

Class Two

Class two digital signatures are used primarily for documents such as electronic filing of tax documents. It can authenticate a signer’s identity against pre-verified data. 

Class Three

This provides the highest level of security and is used, for example, in court filings. A business or individual must prove their identity through a Certifying Authority (CA) before signing the document. 

So Which One is Right for My Business?

When choosing between an electronic and digital signature, it all comes down to how important the document you are signing is. For example, those in healthcare or government would most likely use digital signatures to ensure the information is under lock and key. 

However, for day-to-day deliveries and business contracts, most people generally accept online signatures and consider them safe. However, if your information is more sensitive, you might want to look into implementing digital signatures for maximum security.

Sign Securely in Seconds with Agreeable

Due to the Covid-19 pandemic, online signing has almost become the norm. Not only is it friendlier to the environment, but it is a lot more secure. 

Agreeable offers a simple solution to seamless online signing that is legal, secure and — best of all — free. Sign up today and make signing simple with Agreeable.