The difference between electronic and digital signatures is that the former is simpler and less secure, while the latter involves more elements and advanced security measures.
There’s been an ongoing debate about whether a digital signature is the same as an electronic signature, and the answer to that is no. While it may be easy to mix up these two terms (electronic vs. digital), the difference between the two signature types is significant.
Knowing how these signatures differ can help you choose the right type and sign your documents properly. Let’s get started!
Key Takeaways
- The key difference between electronic and digital signatures includes safety levels and the creation process.
- E-signatures are simpler than digital signatures—you can add them using text or PDF editors, whereas you need software with Public Key Infrastructure for digital ones.
- Both signatures are valid in various regions around the globe; electronic ones are more common in the US, whereas digital signatures are more widespread in Europe and India.
- Most regulatory acts demand digital signatures for more confidential files (e.g., wills and investments) and e-signatures for risk-free documents (e.g., time-tracking company statements).
What Are Electronic Signatures?
Electronic signatures are marks on documents presented in an electronic form. Their purpose is to show a signer’s consent to specific document stipulations, offering a modern alternative to the traditional wet signature method.
Before becoming officially legal, such signatures were used in the 19th century in telegraphed messages, mainly for signed autographs. As technology progressed, they have become easier to create and have obtained two main forms:
- Typed signature—a common example of an electronic signature, which you can create by typing your name using a text document reader and positioning it within a file.
- Handwritten signature—you can sign a document with it either by using a special font that looks like handwriting or by signing your file manually, scanning the signature, and placing it within the document.
Due to their nature, electronic signatures are not highly secure, as adding them does not involve special safety protocols. This further means that e-signatures are not very difficult to modify. For instance, redacting PDFs or Word files will delete their signature, which is one of the many ways to remove signatures from PDFs or text-based documents.
Because of this, many users wonder if an electronic signature is legal and whether merely typing your name is an electronic signature. The answer to that question is yes. Specifically, this way of document signing is valid and abides by the laws of the most widespread international regulations.
What Are Digital Signatures?
Digital signatures are highly secure document elements by which a signer officially agrees to specific conditions. They ensure the signer’s identity (using audit trails) and that the document remains intact during and after the signing process.
Firstly, you can create a digital signature using software with hash functions or mathematical algorithms and a timestamp.
Then, the entire document undergoes encryption, which makes it unreadable for anyone who accesses it without decrypting it first. During encryption, private and public keys are generated. The signer encrypts the file with the private key and shares the public key with the receiver to decrypt it. Together, encryption and decryption make cryptography.
In addition to cryptography, digital signatures are based on Public Key Infrastructure (PKI), a set of processes and regulations that enable encryption and document signing.
PKI involves digital certificates, providing security by recognizing devices, users, and actions. With such certificates, you can secure your WiFi, Virtual Private Network (VPN), and other types of connections, web pages, or systems that support multi-factor authentication (MFA).
A digital signature isn’t about handwriting or typing, it’s defined by the use of cryptographic keys and digital certificates. Typing a name or using a stylus may look like a signature, but unless it’s backed by PKI, it’s still an electronic, not a digital, signature.
Electronic vs. Digital Signatures: Critical Differences
There are many differences between an electronic and a digital signature, as they imply different usage, security levels, and regulatory requirements.
Let’s take a closer look at these electronic and digital signature differences:
Security Comparison
One of the main differences between electronic and digital signatures lies in their security levels and protocols.
As said, electronic signatures do not feature any high-end safety measures, and you can edit or remove them. If you want to secure your files further, you can opt for a file format that allows for additional protection layers (e.g., PDF).
For instance, you can password-protect PDFs or encrypt PDF documents to ensure that only the receiver can access and use the file. Similarly, you can prevent modification by making your PDFs non-editable.
With digital signatures, you won’t have to use additional tools to secure your documents, as they come with built-in features such as encryption, audit trails, and cryptography. This means that no one but you and the file recipient can access it, let alone alter it.
Lastly, another outstanding feature of digital signatures is automatic identity verification, which is not an integral part of electronic signatures. This feature detects a user’s IP address and tracks their activity (typing, cursor movement, etc.) using audit trails, ensuring that the signer is who they say they are.
Implementation Requirements
Additional differences between electronic and digital signatures, besides security, are accessibility, usability, and price. The main reason is the complexity of the signature and the services you can get from both.
For example, you can find tools for creating e-signatures almost anywhere (text and PDF online and offline readers and editors). On the other hand, only designated software can make digital signatures.
While e-signature tools may be easier to find, the signatures you can create with them are not as secure as the ones you can get using digital signature software. This further means that digital signatures are less affordable than electronic ones.
Finally, most users find it equally easy to create these signatures. This is because both of them require you to know how to use a text or a PDF editor. The only extra step is that you need to streamline cryptography (encryption and decryption) for digital signatures.
Regulatory Compliance Differences
We can also find electronic and digital signature differences by examining regulatory compliance and the featured policies, standards, and safety levels.
For instance, most industries (e.g., healthcare, legal, and finance) in the USA accept e-signatures. Yet, such signatures must fulfill specific criteria—the use of audit trails, showing the user’s intent, consent, and record association.
On the other hand, the same industries in the European Union (EU) require digital signatures. Obviously, signing documents this way does not entail the additional above-mentioned security layers that e-signatures demand.
Additionally, here is a set of preferences regarding the use of the two signatures for particular documents on the global level:
| Industry | E-signature preferred document use | Digital signature preferred document use |
|---|---|---|
| Healthcare | Non-clinical agreements | Prescriptions, insurance, and medical records |
| Legal | Engagement letters, client contracts, and internal approvals (identity verification is a must) | Wills, deeds, and notarial documents |
| Financial | Account disclosure or opening (with verified identity) | Loans, disclosures, and investment agreements |
Legal Framework for Electronic and Digital Signatures
There is a minor difference between electronic and digital signatures in terms of legal framework usage. Regardless, it is important to know which acts regulate them and how each regulation is relevant for using the two signature versions.
Let’s examine these regulations in detail:
The ESIGN Act and UETA
The Electronic Signatures in Global and National Commerce Act, or the ESIGN Act, was introduced in 2000. Together with the Uniform Electronic Transactions Act (UETA), issued in 1999, these two are the main acts regulating the use of electronic and digital signatures.
The aim of both regulations is to validate digital and e-signatures, with the former having Federal law jurisdiction and the latter working under State law.
Officially, these two acts define e-signatures as an electronic process, symbol, or sound attached to a record and executed with the signing intention. ESIGN and UETA treat digital signatures as a type of electronic signature, but they don’t specify cryptographic methods. However, in practice, digital signatures offer greater security due to the use of encryption, certificates, and PKI.
Interestingly, the UETA and ESIGN Act state that it is necessary to use e-signatures when signing official documents. At the same time, they allow for digital signature usage but do not regard it as necessary for any documents.
This may be the only difference between electronic and digital signatures, considering the two major US data regulation acts.
International Regulations
Non-US regions and countries also have regulatory acts that validate and control the use of electronic and digital signatures.
Let’s examine the top four international regulations and how they relate to signing documents:
| Regulatory act and region | Electronic signature relevance | Digital signature relevance |
|---|---|---|
| eIDAS—European Union | Simple Electronic signatures have limited legal strength | Both Advanced Electronic Signatures (AES) and Qualified Electronic Signatures are widely used |
| PIPEDA—Canada | Valid if the signer's intent, verification, and data integrity have been proven | Used mostly for court and federal documents, and generally weighing more than e-signatures |
| ETA—Australia | Accepted only if the signer agrees to this type of document signing and his/her identity has been verified | Not obligatory to use, but can be used for government documents, indicating higher security |
| IT ACT—India | May or may not be valid based on specific contexts and circumstances, including consent, intent, and integrity | Generally accepted, except for documents that cannot be signed electronically (power of attorney, will/testament, trust deeds, and documents for property sale |
When to Use Electronic vs. Digital Signatures
You should use electronic signatures for internal processes and low-risk documents, whereas digital signatures are more suitable for high-security situations and long-term validity.
Let’s learn more about the use of these signatures:
Best Uses for Electronic Signatures
Businesses and other professionals use e-signatures for low to medium-risk documents such as offer letters or non-disclosure agreements. Additionally, companies and various institutions use electronic signatures to regulate internal affairs.
For instance, the HR sector in a company may use this signature for timesheets, helping them track employee time and manage approvals. Furthermore, job offers, signings for IT equipment, and similar policies require e-signatures.
In the medical industry, you can sign files that are non-sensitive (they do not reveal specific medical conditions or treatments), like e-consent forms. Finally, you can find this signature type in consumer documents, such as the ones enforcing guarantees and warranties.
Given the numerous applications across various industries, knowing how to properly create an electronic signature has become an essential professional skill.
Best Uses for Digital Signatures
As high-risk documents require high protection, digital signatures are present in various industries with such files. For example, you must use this signature for banking and financial services, including loan agreements (business, car, and home loans).
Moreover, many official government documents demand digital signatures, some of which are government bids and tenders, which users can sign on e-tender platforms. Another frequent type of government document where this signature ensures integrity is an eProcurement contract, mostly used in the public sector.
Similarly, you can use digital signatures for intellectual property or when making court filings (e.g., court submissions). Lastly, digital signatures are standardly used for medical records, such as prescriptions and diagnoses, as these files are highly confidential.
Common Misconceptions and Myths
As these two signatures are easy to mix up, there are many misconceptions revolving around their usage, security, and validity.
Let’s analyze and debunk the most common myths:
"They're Basically the Same Thing"
Electronic and digital signatures differ in various aspects and are not the same thing. The misconception that they are identical probably arose because the terms ‘electronic’ and ‘digital’ have similar meanings.
Another reason is that documents in different formats can have both types of signatures. For instance, a PDF signature can be a digital signature or an electronic one, depending on the signing tool you use to create it.
Plus, an example of a digital signature can include typed text, which is also one of the ways to create an e-signature. Yet, the safety protocols surrounding signature creation are what set these apart.
Sometimes, confusion may also arise between watermarks and signatures. While you can add both using a Word reader and a PDF watermark tool, watermarks are meant for copyright protection and do not provide consent to any document stipulations.
"Electronic Signatures Aren't Secure"
Electronic signatures may not be as secure as digital signatures, but they can boast decent protection levels. We know that e-signatures are easier to tamper with or remove (e.g., by flattening PDFs or Word files). However, with additional protection layers, users can prevent this and other incredulities that this signature type may bring.
As mentioned, you can password-protect your files for secure sharing and disable editing to prevent modifications. To maximize the credibility of the signing process, you can ensure the following:
- Intent (e.g., using screenshots)
- Consent (with an e-signature disclosure, such as UETA)
- Identity verification (video call, ID, or PIN code via sms)
"Digital Signatures Work Without Internet"
Online and offline functionality is the significant difference between electronic and digital signatures. Specifically, you can add e-signatures using offline programs, which is not possible for digital ones.
This is because mathematical algorithms and hash functions cannot work offline. This further means that you cannot encrypt your files or create private and public keys, rendering the entire process futile.
Therefore, before trying to add a digital signature to your document, you and the receiver must have a stable internet connection.
"All Signatures Are Equally Valid"
Although various acts validate non-traditional signatures, their level of validity depends on the document type and industry, as well as regulatory differences.
Examples of this are the eIDAS Act in Europe and the IT Act in India. The former allows for e-signatures but considers them less valid than digital ones. The latter demands the use of digital signatures for the majority of files and industries. It also regards e-signatures as valid only under specific conditions (proof of consent, integrity, and identity).
In contrast, electronic signatures are universally accepted in the US, while using digital signatures is possible but not obligatory.
Globally, more trustworthy documents (e.g., loans and medical records) demand more secure digital signatures. Conversely, e-signatures are preferred for low-risk files (e.g., internal company regulations).
Sometimes, the security difference between electronic and digital signatures is irrelevant, as you cannot use either (e.g., signing POAs in India).
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Final Thoughts
The difference between an electronic and a digital signature reflects their usage, security levels, and complexity. Both signature variants are valid nearly everywhere in the world—you can use the digital ones for high-risk files, and the e-signatures for low-risk documents, in most regions.
US citizens can use an electronic signature for almost every document type as long as they ensure necessary aspects such as the signer’s intent, identity, and consent. Creating any signature type won’t be challenging and will go without a hitch as long as you use simple and reliable tools such as PDF.net.
Electronic and digital signatures are a good and effective way to replace a traditional one and save time, do business, and manage various protocols quickly and hassle-free.