Electronic signatures (e-signatures for short) or digital signatures are needed to confirm if a digital document is genuine or not. You need to have an electronic signature software to create one. If you’re wondering how it works, this article will explain about digital signatures and how it works.
What Is an Electronic Signature?
An electronic signature is similar to a handwritten signature and is used for contracts or documents that require a signature. It is rapidly replacing the handwritten signatures because of its efficiency and faster documentation process. You can use this software to create electronic signatures but there are many kinds of software to choose from. It has many names. It can be called an electronic signature, digital signature or e-signature software. It is a great solution to your electronic signing needs and has flexible options for your business.
To know what software is a right fit for you, we recommend you read CrowdReviews.com’s digital signature software reviews for more information.
Why Do We Need Electronic Signature for Our Business?
Since the times of the Roman Empire, signatures are used as an authentication of an agreement. They used seals or signatures as their legal contract documentation authentication. In 1830s, when the Morse code and the telegraph was invented, electronic signatures became legally recognized. Because they wanted more privacy and security for these electronic signatures, Martin Hellman and Whitfield Diffie created public key cryptography. They were considered as the pioneers for cryptography and were mentioned in Stanford’s news. In 1998, the first legally electronic signature was the Joint Communique, an agreement between United States and Ireland.
According to TechAdvisory, we use electronic signatures because of the following reasons:
- They help reduce costs. The use of paper increased from 92 to 208 million tons in just the last 20 years, according to ThePaperlessProject. Did you know that in the United States, companies use approximately 30 billion papers just for printing or copying contracts and documents? If one document costs $6.50 and 500 contracts are signed, the yearly costs of it would be $3,250.
- It helps save the planet. We mentioned earlier that we use a lot of paper. When you’re using electronic signatures, it will help save our trees and reduce the amount of carbon emissions we have yearly.
- It helps reduce any fraudulent transactions. Because digital signature software is continually improving on their service, they make sure that the integrity of an electronic contract is guaranteed. It now has the feature of real-time authentication and invalidates any electronic document that has been modified or changed.
- It boosts customer satisfaction. The waiting times of a paper document can be frustrating for customers and businesses alike. The electronic signature process is fast and convenient, making the user experience more positive.
- It increases sales. Because it’s faster to use electronic signatures, you’ll be able to gather more clients in a faster and efficient way. The more customers you get, the more it can increase your business revenue.
CrowdReviews.com will help you decide on what software to use by reading more on their digital signature software reviews.
Frequently Used Digital Signature Capture Methods
There are many kinds of digital signature software out there with different methods to choose from. Below are the most frequently used digital signature capture methods in the market today:
- By fax or mail. This method was the most commonly used before the use of smartphones. This is used for those who prefer to sign contracts using paper or serves as a backup. You can manually upload the file to an online service.
- In-Person. This method would need you as the signer to sign in person. It usually has a witness and a video to make sure you were there when it was signed.
- This method would let you manually write your signature on a piece of paper then uses your webcam or a camera connected to a compatible device to capture your signature. It will be automatically applied to the document afterwards.
- Keyboard/keypad. This method is done by just typing in your name using a keyboard or keypad. Some can customize it by changing its font.
- This method is the most common, as it is very easy to do. You just need to use your mouse by clicking and holding down the button and drag the mouse to “create” your signature.
- Mobile device (Phone or tablet). This method uses your finger to sign in the touch screen of your compatible mobile phone or tablet.
- Tethered mobile device (Phone or tablet). This method is similar to the mobile device except that it is linked to your device to create a more accurate signature.
Each digital signature tool has its own way to capture digital signatures. You can read more methods or technique in digital signature’s webpage.
How It Works
Digital signatures have hash algorithm, hash values, public keys and private keys. What does this mean? Let’s start with hashing. Hashing is the basics of data structures. Hashing is the process where you use a hash algorithm to apply to a hash key that generates a hash value. According to SearchSQLServer, hashing is similar to a directory where you can find it in a database. It is normally used in encryption algorithms. Let’s start with the definition of a hash value. .
A top digital signature software uses a hashing algorithm, also called a hash function. The hashing algorithm is thought to be from the idea of a “mixed up” or encrypted version of the original or represented value. Hash value makes sure that the original document has not been changed or modified. This is very important, as hashing makes sure that it is almost impossible to find out the original data without the data used in the hash value creation.
Hashing is used because of three important things. These are to:
- Send important documents. Each hash can be checked if a file has been transferred correctly or notify you if the document has been deliberately altered.
- Database searching. Searching files in your database is much faster because of the hash value’s unique values.
- Secure passwords. Because hashing can check the validity of your data, it can also be used to secure passwords, making it safe and secure.
The good thing about hashing is that there is a very, very low chance that any incidents or hacking can be made, thus lessening the chance of the interaction being changed. If you want to try out how hashing tables work, read WikiBooks’ article or solve InteractivePython’s problems.
Now the next thing you have to obtain is a private key and a public key. You shouldn’t have any problem in getting them because it is already included in the electronic signature tool. The public key can be given and is available for anyone who needs it and in this case this is your customers. This is needed to authenticate your signer or your customer’s digital signature. A private key on the other hand is only available to you and your customer.
To start signing the electronic document, you need to send your customer your public key and is usually done automatically when you send them an email message containing the document that needs a signature. Your customer will use your public key and apply it to encrypt your message. Once done, your customer will send the email in an encrypted form back to you. Your customer needs to initiate the electronic signing process which is usually by clicking on the “Sign here” button on the email. When they sign the document, there would be a distinctive digital fingerprint (this is the hash) created. In this way, you’ll be able to recognize the difference if it has been altered or changed.
For your customers to append their signature to the file, they would need a hash result and your digital certificate (this includes the public key). The digital certificate basically is your proof that you are the owner of your public key. The hash result, public key and your digital certificate will be combined to make your customer’s digital signature. The top digital signature software will always make sure your certificates are up-to-date to let your customer know that you are legitimate and have a strong security system.
Once you receive your customer’s message, you use your private key and apply it to decrypt your message, making your customer’s email readable. By using encryption, we make sure that you and your customer can only read the message and no one else. Even if someone tries to intercept or hack the message, he or she would not be able to make any changes because of the email encryption.
It may sound very complicated but it basically having e-signatures can be very helpful especially in today’s digital age. Search Security has made an awesome infographic about how digital software works.
This software can be different in so many ways, so make sure your company utilizes it to make your processes faster and efficient. In a nutshell, the best digital signature software provides flexible solutions for your company’s unique electronic signature needs. Check out CrowdReviews.com’s reviews on the best ones in the market today!
John Tovar
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