All you need to know about e-signature

The world is exploring paperless and contactless solutions in daily life. After all, nobody wants to waste time riffling over pages or worrying about misplacing crucial documents. As the quest for a paperless life continues, something that most of us do (without even realizing it!) is e-signing. So, here's all that you need to know about it!

What is an e-signature?

An e-signature is the authentication of any electronic data using any reliable electronic technique. It is an umbrella term that includes digital signatures and clickwrap agreements ("click to agree" boxes). It signifies the person's consent to any document's contents and authenticates his identity. Further, it's as legally binding as any wet signature in India, under the Information Technology Act (IT) 2000.

How do wet and electronic signatures differ?

Electronic and wet signatures essentially differ by their modes of execution. Wet-signatures are signed on paper with pen, wax, or feather; e-signatures are signed on an electronic platform.

Though both types perform the same task, it's the level of security offered that makes the difference. Wet-signatures are prone to imitation; most e-signatures come with encryptions ensuring the signer's identity.

How do digital and electronic signatures differ?

Digital signatures are indeed e-signatures. Both are often used interchangeably, but there's a subtle difference in between. While an e-signature requires typing the signer's name or signing a screen with a digital stylus, a digital signature requires "Personal Key Infrastructure" to identify the signer. Digital signatures are certified, while e-signatures are not.

What are the types of e-signatures?

The IT Act 2000 legalizes the following e-signatures types in India-

  • 1.Virtual signature:

    It is the most basic form of e-signature. It is executed by attaching any personalized mark (image, symbol, etc.) of the signer on any e-document. Just affix the photo of your signature, and the document is signed! It is the simplest, quickest, and most pocket-friendly way to e-sign any document.

  • 2.Aadhar-based e-signature:

    Aadhar-based e-signature is a digital signature that uses Aadhar to authenticate the signer's identity.

    To e-sign using Aadhar, the document is uploaded with an Application Service Provider impanelled by the Controller of Certifying Authorities. An e-KYC service authenticates the signer's identity using OTPs or biometrics. The signer gets a digital certificate (Class- "Aadhaar e-KYC OTP") issued by a licensed Certifying Authority (CA) to sign once. The signer gets OTP on the registered mobile number, entering which the document is signed digitally and ready for download.

    Aadhar-based e-signature is user-friendly, fully digital, and time-efficient. It is particularly efficient for any enterprise requiring to e-sign occasionally.

  • 3.DSC E-Token Signature:

    DSC e-token signature is a digital signature that uses a Digital Signature Certificate (DSC) issued by a CA to authenticate the signer. A DSC is valid for 1-2 years.

    DSC contains a private and public key. It is stored on a USB, functioning as an e-token, and secured by a password. To sign an e-document, the signer inserts the e-token to the device which contains the to-be-signed document. The document is e-signed upon entering the DSC password.

    DSC e-token signatures are particularly effective for any enterprise requiring repetitive e-signing. It is commonly used in Government transactions and is mandatory in filing corporate documents, e-tendering, etc.

Where are E-Signatures used?

E-signing is efficient in diverse sectors, like:

  • - HR departments, as a lot of their paperwork (employee agreements, renewals, tax forms, etc.) require quick and transparent signing.

  • - Retail industry, as companies can sign agreements between corporate entities, like Non-Disclosure Agreements, sales agreements, etc., without printing or brokerage costs.

  • - Healthcare sector, as stakeholders like doctors, hospital administrators, insurance reps, etc., can conveniently sign healthcare documents without wasting the turnaround time.

How can switching to e-signatures help you?

Here's how switching to e-signatures can help you:

  • 1.Pocket-friendly:

    82% of companies globally spend billions on paper. With e-signatures, such undesired expenses are waived. Unlike wet-signatures, parties can e-sign by staying anywhere, saving them money and time spent on travel.

  • 2.Improve productivity:

    By digitalizing the workflow through e-signing, paper turnaround time is minimized, and the documentation process is simplified.

  • 3.Prevent forgeries:

    In 2020, India witnessed over 5500 ID thefts and forgeries! Well, thanks to AI-powered authentications and legal monitoring, E-signing diminishes such risks and ultimately ensures documents' security.

  • 4.Audit-trail:

    Every valid e-signature leaves an audit trail that records the logs on the signed document. It stores information like the time and place of signing by each party, alterations of the document, etc. The audit trail facilitates cross-checking the authenticity of the document.

    No wonder, e-signature is a game-changer in all industries. Any enterprise that requires repeated documentation involving just someone's approval can benefit extensively from e-signatures. If you haven't switched to e-singing yet, it's never too late! Go ahead and reap the benefits now!

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