The number of online transactions is increasing day by day. A simple purchase from an eCommerce store is the best example. However, the primary focus, in this case, refers to trust. Businesses want to shift their documentation flow online. Digital platforms provide much-needed flexibility for online transactions.
However, the lack of trust can influence the motivation of consumers, public authorities, and businesses for electronic transactions. Therefore, eIDAS regulation is one of the precedents that help in governing the use of electronic signatures. The following discussion would focus on important implications associated with the regulation, such as a basic outline of the regulation.
The other significant highlights in this discussion would deal with the basic principles of eIDAS. The discussion would also throw some light on the different types of signatures validated by the regulation. Subsequently, the discussion would cover the benefits of the e-signature regulation for businesses and their application in different sectors.
Also Read: An Overview of UETA and ESIGN Act
Origins of the eIDAS Regulation
eIDAS (electronic Identification, Authentication, and trust services) is the commonly accepted name for the EU regulation, 910/2014. The regulation found its roots on July 1, 2016, when the European Commission implemented it across all regions in the European Union. The eIDAS regulation appears focused only on electronic identification. However, you can also find precedents for trustworthy services of electronic transactions.
The European Commission established the regulation to create a single digital market. The regulation also has two other objectives. The regulation aims at ensuring access to public services of any State of the Union for all citizens of the EU. Citizens could use their electronic National ID number for obtaining access to public services.
Another objective of the regulation is the creation of an internal market for trust services. The regulation implies the provision of the same legality to trust services like conventional paper-and-ink processes. So, eIDAS is a regulatory instrument that specifies legal and security standards for trust services and electronic identification. What are the trust services? Let us find out something about them.
Criteria for Trust Services
The eIDAS regulation provides a clear impression of the criteria for classifying trust services. Article 3, paragraph 16, gives a precise definition of trust services. Trust service is an electronic service that is ideal for remuneration purposes. The scope of ‘trust service’ includes the following tenets:
- Creating, verifying and validating electronic signatures, electronic registered delivery services, and related certificates and electronic seals or timestamps.
- Creating, verifying and validating website authentication certificates.
- Safeguarding electronic signatures, seals or certificates related to these services.
There are a number of myths spread worldwide regarding the use of e-signatures. It is important to understand these electronic signature myths and facts behind them.
Summarizing the Regulation
eIDAS (electronic Identification, Authentication, and trust services) develops trust, security, and transparency needed to bring the whole EU on the same page. So, online commerce and electronic transactions could flourish in the EU with support from citizens, public authorities, and companies. The summary of working of the regulation in four simple points can help in understanding its scope better.
- The regulation outlines the conditions for member states to recognize the methods for identifying people and legal entities followed by other member states.
- The regulation also serves as a supervisory and accountability instrument. As a result, it enables qualified trust service providers to provide qualified services at national and cross-border levels. Also, eIDAS presents conditions for maintaining a high level of security in electronic transactions.
- The regulation presents a comprehensive legal framework for the governance of electronic documents, electronic stamps, electronic signatures, and electronic timestamps. Furthermore, it also governs certified website authentication services and certified electronic delivery services.
- The regulation is mandatory for ensuring access to public service across borders in EU countries having electronic identification (eID) documents.
Types of Signatures Recognized in the eIDAS Regulation
eIDAS defines the three types of recognized electronic signatures. They are –
- Electronic signature
- Advanced electronic signature
- Qualified electronic signature.
1. Electronic Signature
An electronic signature is the data in electronic form that is logically associated or attached to another data in electronic form. Signatories can use an electronic signature for signing documents. According to eIDAS, all electronic signatures are legally admissible. The regulation specifies that signatures in the electronic form cannot be denied for legal recognition due to their form.
2. Advanced Electronic Signatures
Advanced electronic signatures are slightly improved than typical electronic signatures. These type of electronic signatures comply with the following requirements.
- Unique link with the signatory.
- Linked with data that is signed in a manner suited for detecting any changes in the data.
- Capabilities for identifying the signatory.
- Developed using electronic signature creation data. Most important of all, signatory could use the data under their control.
- The final document complies with tamper-evident characteristics.
3. Qualified Electronic Signatures
Qualified Electronic Signature is an advanced electronic signature created with a qualified electronic signature creation device. The device should have a qualified certificate for electronic signatures. The device could be a smart card or a mobile app for generating a one-time password. Signers have to use certificate-based digital ID provided by a qualified EU Trust Service Provider.
Also Read: Information Technology Act, 2000
Guiding Principles for the eIDAS Regulation
Now, let us explore the different guiding principles of eIDAS that make it a trusted regulation for electronic transactions. The guiding principles can help us learn about the foundation of the regulation. As a result, we can understand the benefits of this regulation easily. Here are the four guiding principles for the eIDAS regulation –
1. Trust
Trust is the first pillar in the foundation of the regulation. It ensure that transactions completed by the regulation are reliable, secure, and legally enforceable. Technologies such as electronic signatures, electronic services delivery, and electronic identification help in achieving these outcomes.
However, the lack of trust can influence the motivation of consumers, public authorities, and businesses for electronic transactions. Therefore, eIDAS regulation is one of the precedents that help in governing the use of electronic signatures. The following discussion would focus on important implications associated with the regulation, such as a basic outline of the regulation.
The technical standards defined in the regulation ensure complete assurance to all the parties involved in a transaction. Apart from technical standards, the regulation also provides a comprehensive liability framework. The liability framework addresses legal, enforceability, and jurisdictional concerns.
2. Cross-border
Cross-border transactions are one of the prime objectives of eIDAS legislation. The regulation ensures compliance with legal aspects related to cross-border transactions. Therefore, services provided in one jurisdiction are legal while transactions covering the service originate and conclude in another jurisdiction. The regulation makes sure that the legal standards for electronic transactions are similar across all jurisdictions. As a result, electronic transactions could not be restricted based on local jurisdictions.
3. Seamless Transactions
The trust services and electronic identification transactions should be completely seamless for the user. Users should get the same uninterrupted experience without any influence of their current location, device, or language. The regulation covers personal devices such as laptops and mobile phones as well as public areas such as airports. So, the regulation reduces concerns of authentication and identification when moving from one service to another. Users could also move from one location to another in the EU and use electronic signing and identification services seamlessly.
4. Transparency and Accountability
The fourth founding pillar of the regulation relates to transparency and accountability. The regulation outlines specific obligations for trust service providers and a clear definition of acceptable signatures. As a result, users could recognize qualified trust service providers easily. The most important highlight, in this case, refers to specific risk management and security precedents for trust service providers. The risk management approach covers aspects such as procedures, operations, and conduct.
The guiding principles of eIDAS clearly show the intent to develop a credible and reliable system for electronic identification. The other traits of the regulation appear clearly in the underlying principles such as cross-border, seamless, and convenience in services.
Still confused about adopting electronic signatures? Check out these top reasons to adopt electronic signature for your business.
Applying the Regulation in Different Sectors
After a reflection on the origins, implications of the regulation, and types of recognized signatures let us find applications. The e-signature regulation is applicable in various sectors such as financial services, transport, and online retail.
- Financial Services
The financial service sector benefits the most from the eIDAS legislation. Financial services can find better opportunities across borders. Customers in the financial service sector demand online services and compliance obligations keep getting complex. Therefore, the digitization of identifying, authenticating, and security of transactions became evident.
Therefore, eIDAS regulation is one of the precedents that help in governing the use of electronic signatures. The following discussion would focus on important implications associated with the regulation, such as a basic outline of the regulation. However, the lack of trust can influence the motivation of consumers, public authorities, and businesses for electronic transactions.
A closer look at the different examples of the application of electronic identification services in the financial sector can clarify some doubts. The regulation governs e-signatures used for signing financial service contracts remotely. Also, the financial services sector depends on electronic registered delivery service that comes in the scope of the regulation.
- Online retail
As we discussed previously, the regulation offers a comprehensive legal framework for governing electronic transactions across the EU. The online retail sector derives major benefits from the regulation. Online stores can ensure secure electronic transactions with customers alongside implying formidable levels of trust in the transaction. Furthermore, the transactions governed by the regulation are legally valid across the European Union.
One of the examples of the regulation’s use in the online retail sector relates to the better identification checks for customers. This application can be helpful in the case of purchasing high value or restricted goods. Another prominent example of the use of eIDAS in the online retail sector is the facility of qualified website authentication certificates. These certificates can ensure the better trust of customers in online retail stores.
- Transport and Logistics
The transport sector also relies on electronic identification and trust services for a seamless business process with ample security. Electronic identification and trust services provide flexible, secure, and resource-effective document flow between suppliers, carriers, and receivers. As a result, the orders could arrive on time without any administrative setbacks.
The most notable example of electronic identification and trust services in the transport sector is in the car-sharing services. The regulation governs conditions for proving identity and secure login of customers in car-sharing services. For freight transport and logistics applications, electronic registered delivery service helps in the secure and faster exchange of contractual documentation.
- Professional Services
Other professional services such as accountants, architects, and lawyers also find applications of electronic identification and trust services. Trust is the prominent concern in the professional services sector, and so the regulation is applicable here. First of all, electronic identification and trust services simplify many complex formal procedures in this sector.
The regulation has assured professional services regarding operational efficiency, thereby implying the flexibility to focus on customer services. The regulation governs the example of electronic identification to validate the identity of clients. As a result, it is easier to establish contractual relationships. Furthermore, electronic registered delivery service can help professionals in sending crucial documents without any risk of alterations, damage, or theft.
How to get the eIDAS Certificate?
Many businesses adopt electronic signatures and identification methods for faster and streamlined operations. However, many of them are also confused about how to get eIDAS certificate. So, let us find out the different types of certificates available in this regulation. Recently, the EU announced the PSD2 directive that validates two types of electronic signatures.
The two electronic signatures are –
- Qualified Certificates for Seals (QCSEALs)
- Qualified Website Certificates (QWACs)
Also, you can find certificates for other qualified trust services such as a qualified certificate for electronic signature. You can receive your certificate from a Qualified Trust Service Provider. The European List of Trusted Services provides an outline of the different local qualified Trust Service Providers.
The next step in how to get eIDAS certificate relates to providing information to the trusted service provider. You have to provide your authorization number registered with the qualified Trust Service Provider. The next important detail required in the process is your role in a transaction. Following the entry of information about your role, you have to select the certificates which you need. Based on your eligibilities, the trust service provider would provide you with the certificates.
Benefits of the Regulation for Companies
The benefits of the regulation for every business depends on electronic business transactions in Europe. Companies can gain the following benefits from the regulation:
- Better security and trust in electronic transactions can foster the creation of relationships with customers.
- Seamless and convenient cross-border transactions with ease.
- Improved transparency and accountability with the technical and liability standards in the regulation.
- Reduction in barriers for establishing a business in EU countries.
- Saving costs of material, shipping, and management.
- Time-saving in documentations for improving focus on core business tasks.
- Aligning the focus of companies towards digital transformation with better and flexible customer service.
Also Read: Top 10 Electronic Signature Myths and Facts
Conclusion
On a closing note, the eIDAS legislation proves to be a wide-ranging instrument to promote the adoption of electronic identification. The digital transformation of businesses is driving the attention of companies towards electronic business transactions. However, the legal validity of electronic signatures and trust services may be a formidable barrier.
Therefore, the regulation provides a precedent for validating electronic signatures across all member states of the EU. The discussion reflected on the basics of the regulation alongside summarizing the key points of the regulation. The discussion also focused on the types of recognized signatures as well as the founding principles of the regulation.
The other significant highlights of the discussion included the different sectors which use the regulation and the process for certification. Apart from the simple process of getting a certificate, the discussion also presents a brief insight into the benefits. So, if you are ready to jump on the digital transformation trend, then this discussion can be a helpful guide!
