Electronic and digital signatures are crucial components of the modern Australian business landscape. While both allow for the digital signing of documents, many businesses may not be aware of a fundamental difference between them. Understanding this distinction is essential for making informed decisions that best suit your business needs.
In this article, we delve into the nuances between electronic signatures and digital signatures. By exploring their unique advantages and potential drawbacks, you’ll gain the clarity needed to choose the right solution for securely signing your documents. Whether you’re a small business owner or part of a large corporation, knowing the differences and benefits of these technologies can streamline your operations and enhance your document management processes.
First things first, let’s talk legalities in Australia when it comes to digital and electronic signatures.
In Australia, digital and electronic signatures are primarily governed by the Electronic Transactions Act 1999 (ETA). This act guarantees that digital signatures are legally valid and enforceable and establishes a structure for their utilisation in online transactions.
One of the ETA’s key strengths is its flexibility in recognising electronic signatures. As long as they meet specific requirements, such as adequately identifying the signatory and indicating their intention to be bound by the document, electronic signatures can be created through a variety of methods. These can range from simply typing a name or clicking an “I accept” button to using advanced electronic signature technologies.
Read on to discover how each type of signature can impact your business and why choosing the right one matters.
Difference between electronic and digital signatures
The primary difference between electronic and digital signatures lies in the level of security and verification they offer. Electronic signatures, under a broad definition, encompass any form of electronic indication of intent to sign a document, such as typing a name or clicking an “I accept” button. They are relatively simple and widely used for their convenience.
Contrarily, digital signatures are a specific type of electronic signature that offers an additional layer of security. They achieve this by employing encryption technology to verify the signer’s authenticity and the document’s integrity, thereby enhancing data protection.
Digital signatures rely on cryptographic algorithms and necessitate a digital certificate issued by a certified Certificate Authority (CA). This makes digital signatures more secure and tamper-evident than basic electronic signatures, ensuring that the signed document cannot be altered without detection.
Electronic signature pros and cons
Pros:
- Convenience: They are flexible and easy to use.
- Speed: Electronic signatures are fast.
Cons:
- Legal recognition: Some jurisdictions require a valid electronic signature.
- Non-repudiation: Electronic signatures carry less evidentiary weight than Digital Signatures.
Digital Signature Pros and Cons:
Pros:
- Security: Offers a strong level of security and guarantees that the document has not been tampered with.
- Legal compliance: Often meets the highest legal and regulatory requirements for electronic signatures in most jurisdictions.
- Non-repudiation: Offers proof that the signer cannot deny their intention to sign.
Cons:
- Speed: Digital signatures take around 4 seconds longer to apply than Electronic signatures due to the added security protocols.
- Cost: Digital Signatures require digital certificates to be issued by a CA that may incur additional cost per user.
- Cost: Typically, it is more expensive than simple electronic signatures due to the infrastructure needed.
Choosing the right option between an electronic and digital signature
When choosing between electronic and digital signatures, it’s essential to consider your unique business needs, the sensitivity of your documents, and the legal requirements in your jurisdiction. This considerate method will result in a customised and efficient resolution.
For most everyday transactions, electronic signatures are sufficient and offer ease of use and speed. However, digital signatures provide a more secure solution for susceptible documents or those requiring legal certainty. By making a thoughtful decision based on your specific circumstances, you can ensure that your document signing processes are efficient, legally compliant, and secure.
Understanding the variances between electronic and digital signatures is essential for your business. This knowledge enables you to make well-informed choices, guaranteeing that your document signing procedures are practical, legally sound, and secure.
Effortlessly switch between digital signatures and electronic signatures
SigniFlow allows you to switch between digital and electronic signatures when setting up your workflow. This will enable you to choose which signature is most relevant to the type of contract you will sign or require other people to sign.
If you enable the toggle button on the digital signature, that is the signature you will sign with, if you switch it off, you will sign with an electronic signature.
It really is that simple, as can be seen below:
Learn more about digital signatures and electronic signatures here.
