Digital Signatures vs Wet Signatures — Everything You Need to Know
Signatures are the legal standard for agreements and contracts. A wet ink signature is the accepted standard by all enterprises and individuals. It is favored by banks while accepting loans, by landlords while filling out rental agreements, between a buyer and a seller, and the list goes on. With the world entering the digital age due to computers and the internet, dry or electronic signatures have come to the fore as a new standard.
Electronic signature transactions have soared from 89 Mn to 754 Mn in five years. — MSBDocs
The usage of electronic signatures or e-signatures has shot up in recent years. The emergence of various e-signature solutions and the convenience it accords to customers further pushes its popularity. Moreover, with sustainability a hot topic among customers, enterprises are embracing virtual signatures in an attempt to go paperless. However, before delving further into this topic, let’s find out some benefits and drawbacks of dry and wet signatures.
Benefits of Wet Ink Signatures
● Easily Recognizable — Wet ink signatures are widely recognized by firms and corporations and accepted on agreements. More importantly, they are recognized by states as legally binding and act as proof of identity and consent.
● Personal Branding — Wet signatures have enjoyed popularity in the form of autographs. Famous figures have employed them to increase the value of products. For instance, Martha Stewart, the famous American businesswoman, uses her signature as proof of the authenticity of products created by her company.
● Authenticity — The authenticity of the signee is verified with ease due to the person being physically present to attest their signature. Witnesses present during the signing can also verify the identity of the signee.
Drawbacks of Wet Ink Signatures
● Expensive — Wet ink signatures turn out to be expensive when expenses associated with paper, printing, and notarization are taken into consideration. It also requires the physical presence of the signatories and a witness for the signature’s authenticity to be verified. The challenge becomes all the more daunting when there are multiple signatories involved. In a post-COVID world, it becomes a matter of concern for them to simultaneously be in the same room. In addition, traditional signatures have other hidden costs, such as storage, postage, filing, handling, etc.
● Prone to Forgeries — Wet signatures are highly prone to forgery and fraud. Even complex signatures can be forged and require the presence of notaries to serve witnesses to prove their authenticity. In fact, signature forgeries are the most common fraud committed worldwide.
● Problematic for the Environment — Wet ink signatures are unsustainable for the environment since they ultimately require paper and transport. In addition, any errors or typos in signatures can result in reprinting documents, leading to more paper wastage and harming the environment even further in the longer run.
eSignatures, also referred to as electronic, dry, or digital signatures, on the other hand, cancel out the basic cons of traditional manual signatures.
Benefits of eSignatures
● Time-saving — eSignatures save hours of personnel time. Documents needing signatures can be simultaneously sent to all parties involved, even marking a space designated for their signatures. This solves any time restraints and provides convenience to all parties.
● Reliable — eSignatures are highly reliable and provide ample security against fraud and forgeries. Most platforms today come with multi-factor authentication, password protection, and other security measures to keep documentation safe.
● Cost-effective — Customers using electronic signatures can save on office expenses as well as transport-related costs. Sending documents via courier and other unnecessary expenses can be avoided entirely, thanks to eSignature platforms.
● Fast Turnaround Time — Fast turnaround time or TATs add to the companies’ profits and improve their reputation. It also lets customers know that you take your business seriously. Adding eSignatures to your document workflow can reduce your TATs from 5 business days to mere minutes!
E-signatures lower scanning errors by 90% — FinancesOnline
● Sustainable — eSignatures reduce reliance on physical documentation, allowing businesses to go paperless and contribute positively to the environment.
● Enhance Customer Experience — Going entirely digital helps eliminate bottlenecks in the documentation process. Processes like printing, signing, scanning, and emailing can be eliminated, making the experience much smoother for customers.
Drawbacks of eSignatures
● Unfamiliarity — Customers used to traditional signatures find it challenging to transition to online signatures. A lot of ground is yet to be covered when it comes to trust and security. Rapid upgrades in technology are bound to make new digital solutions seem wary to most businesses.
Also Read: The ways Electronic Signatures are driving ROI
Legality of eSignatures
eSignatures have gained prominence among industry leaders owing to amendments in laws that recognize them as legally enforceable and binding. eSignatures are accompanied by a real-time trail making it easy to identify any fraudulence or discrepancies. Most countries have their laws for the acceptance of online signatures; here are a few notable ones:
India: Information Technology Act (IT Act), passed in 2000
USA: Electronic Signatures in Global and National Commerce Act (ESIGN Act) 2000 and The Uniform Electronic Transactions Act (UETA) of 1999.
Germany: Electronic Identification, Authentication, and Trust Services (eIDAS)
France: Electronic Identification, Authentication, and Trust Services (eIDAS)
UK: UK Electronic Identification, Authentication, and Trust Services (UK eIDAS)
The Philippines: The Republic Act №8792, or the Electronic Commerce Act of 2000, and its Implementing Rules and Regulations.
Current Uses of eSignatures
● Hiring and Onboarding — Human Resource teams are burdened with paperwork for new employees and lack resources for processing them on time. But with remote work policies in action, HR managers can utilize eSignatures to onboard new employees with ease and increase productivity.
● Tax Documents — Tax documents accept consent or approval from taxpayers through eSignatures. Digitization of information and smooth functioning government portals make it easy to fill in the required information and submit documents digitally
● Sales Proposals — Sales proposals contain a voluminous amount of pages that require more than a day’s worth of reading and understanding. After which, signatures are provided in front of witnesses. However, eSignatures can eliminate the tedious process by digitizing documents and accelerating the process between parties.
● Insurance Paperwork — Insurance paperwork can be digitized easily with online signatures, improving turnaround times and increasing efficiency among insurance agents.
● Bank Forms — Savings and salary accounts needed to be opened after furnishing sufficient proof verifying one’s identity. With the automation of processes, forms can be filled out automatically, and the authenticity of the signee can be verified using eSignatures.
● Non-compete Agreements (NCC) — NCCs can be signed online without interrupting daily workflows. Generation and submission of agreements become easy with the process.
● Non-disclosure Agreements (NDA) — NDAs are used to protect the confidentiality between business owners and stakeholders. Secure digital signatures can be used to hire the right personnel, raise funds, and improve production.
DrySign
DrySign is a state-of-the-art electronic signature solution by Exela Technologies. It provides a platform for businesses or individuals looking to digitally transform their processes and workflows. With digital transformation on the rise and businesses looking to curb expenses, DrySign is a great addition to company processes.
While the pros and cons of dry and wet signatures matter to the stakeholders that use them, dry signatures are here to stay in a modern digitized world. They provide flexibility and security for companies that can use them from any location and effortlessly protect their documents.
Refresh your customer experience with DrySign.
Source: financesonline.com | msbdocs.com
DISCLAIMER: The information on this site is for general information purposes only and is not intended to serve as legal advice. Laws governing the subject matter may change quickly, and Exela cannot guarantee that all the information on this site is current or correct. Should you have specific legal questions about any of the information on this site, you should consult with a licensed attorney in your area.
