Technological advancements have been the cornerstones of progress for human civilization. Over the years, we have witnessed the transformation of many essential activities and processes to the technological front. Electronic signature is one of such technological innovations. The applications of electronic signatures are widely observed in various fields, and it surely presents a reliable approach to reduce the piles of official documents in paper.
On the other hand, many electronic signature myths are making ground everywhere. These myths are primarily developed as a result of misunderstanding and lack of detailed insights into the definition and working of electronic signatures. It is important to understand the hidden electronic signature facts behind these myths.
So, this article would aim at outlining some of the notable e-signature myths to obtain a clear impression of the wrong and the right with e-signatures. In addition to this, the discussion would also focus on the facts about electronic signatures to understand them better.
Before we move towards exploring some of the electronic signature myths and facts, it is justified to have a basic idea of what electronic signature is and how it works!
What is E-signature and how does It Work?
The electronic signature can be defined as a digital version of the physical signature of an individual. It can be used for signing digital documents in different ways. Users can capture their signature on a document or use a click of a mouse button to sign digital documents.
Voice-based acceptance could also be considered as one of the ways to sign a digital document. Electronic signatures first came into existence with the passing of the Federal ESIGN Act, in 2000. There are various types of documents which could be signed electronically, such as policy adherence documents, non-disclosure agreements, executive meeting minutes, business contracts, and terms of service contracts.
Must Read: An Overview of UETA and ESIGN Act
Just like any other new technological innovation, electronic signatures also have found wide-ranging acceptance from different business owners. However, many others are still skeptical about the use of electronic signatures. So, it is essential to show a clear difference between the myths and facts associated with electronic signatures.
Let’s Go Through Most Common Electronic Signature Myths and Facts
Myth 1: E-signatures are not acceptable in court
Fact: The first and one of the most commonly noted electronic signature myths is that they are not legally binding. On the contrary, this is not true as electronic signatures have been considered legal, according to rulings, in most of the cases. All you have to do is prove consent and intent, like in the case of paper signatures to make it legally appropriate. Even if electronic signatures have been responsible for putting paper to rest for signing agreements, they have not left out legality.
It is clearly stated in the Electronic Signatures in Global, and National Commerce (ESIGN) Act that a document or a contract cannot be considered null in terms of validity, enforceability or legal effect in its electronic form. One of the notable electronic signature facts clearly shows that a valid electronic signature would be associated with a record of the time, date, and IP address of the signatories. So, the myth that electronic signatures don’t stand up in court can be put to rest now!
Myth 2: E-signatures are not secure.
Fact: Another one of the common electronic signature myths is that they are not secure, which is completely not true. In the case of electronic signatures, all the legal documents are secured with encryption, and all electronically signed documents are immediately covered into PDF files for additional security. All types of legal documents could be stored online for any duration of time that you want.
Most important of all, the audit trail or details of the time of a signature, time of opening a document, and the IP addresses of the signatories provide an excellent tool to verify the security of your electronic signatures. In addition to that, the majority of electronic signature software have firewalls and other advanced settings and protocols for protection against attempted breaches and other online threats.
Myth 3: E-signatures are difficult to adopt.
Fact: You would also find one of the electronic signature myths regarding the difficulty in the adoption of electronic signatures. Yes, users could indeed require some time, and experience many difficulties in adopting new technology. However, it doesn’t happen in the case of electronic signatures. Electronic signatures could be integrated very easily and that too in very little time! With the paper-based route, you would be spending a lot of time in printing, mailing, and signing.
On the other hand, you have to use the existing templates provided by the electronic signature software and change them if you want according to your needs. Then, just point out the areas which have to be signed and share the documents through email. This way, you not only save time but also make signing documents a much simpler task alongside considerable improvement in business productivity. Now the electronic signature technology seems quite easy to adopt, doesn’t it?
If you still think it is difficult to understand how electronic signature works, check out our previous blog on electronic signature workflow and get to know how easy it is!
Myth 4: You have to spend a lot on e-signatures.
Fact: Electronic signatures are expensive! That is also one of the electronic signature myths you need to pay attention to. You can save a considerable amount of money through electronic signatures. Think of loads of labor hours spent in converting contracts to different formats for emailing. You don’t have to deal with that anymore when you have electronic signatures. Most important of all, you would also be reducing costs associated with running a paper-based office.
With the use of electronic signatures, your office would not be dependent on purchasing paper, maintaining scanners, and printers or storage for signed documents. Moreover, you don’t have to pay any more for postage and courier costs. Even though all these factors are realized quickly, the myth surrounding expensiveness of electronic signatures emerges from the initial high costs.
However, there is no reason to worry as electronic signatures can foster process innovation, thereby leading to better returns on investment quickly. In addition to that, evolving technological advancements related to electronic signatures have resulted in their availability at affordable prices.
Furthermore, you don’t have to worry about storage of documents as you have cloud-based storage options with electronic signature software to keep away the massive file cabinets! With these functionalities of e-signatures, it is proven that they are highly favorable and cost-effective solutions as compared to paper.
Myth 5: You need special technical skills for using electronic signatures.
Fact: The requirement of specialized technical expertise is another one of the widely spread electronic signature myths in the present times. On the contrary, one does not have to be a technical genius for using electronic signatures. A basic understanding of electronic signatures can be sufficient to use them effectively.
Also, the e-signature solutions have made it easy to adopt and use an electronic signature. Easy steps, comprehensive guide, and quick support provided by the electronic signature vendors have removed the hassle associated with this new technology. So, even if you are not a technical person, you can easily use an electronic signature without any special technical skills.
Various companies which have adopted e-signatures have stated that employees find e-signatures easy to use and the companies were able to adopt the technology quickly. Therefore, this myth can also be debunked just like the other electronic signature myths which point towards the difficulty in the adoption of e-signatures.
Myth 6: Electronic signatures are just a trend.
Fact: Whenever a new technology comes, it comes with a boom and after some time, the boom is over. The same most of the people think about the electronic signature that it’s just a trend. It is one of the e-signature myths that has made its space in the mind of most of the people. It is important to know the fact behind this myth to know the truth.
The electronic signature is not just a trend, but it is present and future. More than 60 countries have introduced a specific set of laws and standards for validating e-signatures. It’s not because it’s a trend but it’s the innovation in the business world.
More than 60 countries have introduced a specific set of laws and standards for validating e-signatures. A large amount of data is generated every day by businesses, organizations, and individuals. To deal with the challenge of getting a huge number of documents signed everyday, electronic signatures are quick and efficient solutions.
The businesses in different industries have been readily adopting electronic signature which was previously relying on the paperwork. So, the electronic signature fact is that electronic signatures are more than just a trend, they are the future.
Myth 7: All documents can be signed electronically.
Fact: One of the noticeable e-signature myths is that if used, an electronic signature can be used for any kind of documents. But the e-signature fact here refers to the type of documents that are not considered valid with an electronic signature. The documents could be outlined as follows:
- Product recall notices.
- Notices for cancellation or termination of utility services.
- Court orders, notices, and related documents.
- Codicils, wills, and testamentary trusts.
- Family law documents such as divorce or adoption papers.
- Legal documentation for transportation of hazardous materials.
- Notices for cancellation or termination of life insurance or health insurance benefits.
- Default notices and notices for eviction, foreclosure, or repossession.
So, it is important to know, though electronic signature can be used for different types of documents, there are many documents for which electronic signature cannot be used.
Myth 8: You need a certificate to use electronic signatures.
Fact: Electronic signatures and Digital signatures are two similar terms but both are different. Sometimes, people may get confused between digital signatures and electronic signatures. So, it becomes important to understand the difference between the two i.e. Digital signature vs Electronic signature.
These are digital signatures which require a digital certificate for authorizing the encryption needed. Certificate Authority (CA) is responsible for issuing digital certificates. Generally, large businesses develop their in-house CA while smaller businesses and individuals tend to turn towards a CA provider to obtain digital certificates. Many digital certificate vendors provide various customized solutions for their electronic signature needs that may be availed either through a transaction-based or subscription-based payment model.
So, in order to get over a few e-signature myths, it is important to understand the difference between digital signature and electronic signature.
Myth 9: The choice of e-signature solution does not matter.
Fact: This is one of the electronic signature myths which is primarily based on the premise that every e-signature solution in the market can be suitable for all organizations. There is no surety that you can choose one e-signature solution for on-premise deployment and another one can be utilized as a SaaS (Software-as-a-Service) scaling according to the needs of your business.
Also, the selected vendor should be capable of using innovative technology in combination with comprehensive industry knowledge for better awareness of your common use cases. This can help ease the adoption process and provide better opportunities for success with e-signatures.
Finally, the ease of use is also dependent considerably on the e-signature solution provider. So, you have to make sure that the electronic signature vendor could be able to provide the flexibility of e-signing irrespective of the place or device. Most important of all, the solution should provide a customizable graphical user interface as well as the flexible workflow that can be tailored to various channels and processes.
Myth 10: Multiple electronic signatures cannot be managed.
Fact: This is one of the common e-signature myths spread among the newbies that it is not possible to manage multiple electronic signatures on a contract. On the contrary, electronic signature provides the facility of signing multiple pages of a contract by different signatories. Contemporary e-signature solution providers offer the facility of sharing one document across multiple signatories along with the account holder for the document.
While some solutions would imply that you can limit the sharing of the document up to a certain number of signatories. However, if you need multiple signatories exceeding the particular number on a concerned legal document, then the document can be re-imported and shared among other signatories.
Use of electronic signature can bring several benefits to you. If you have any doubt regarding the use of electronic signature, read out these 10 reasons to adopt e-signature for your business.
Closing Notes
Now we have obtained clear insights into the different electronic signature myths and facts, it would be reasonable to focus on making the initiative! E-signatures not only help in cost savings but also introduced process innovation for businesses to improve productivity.
Even though many electronic signature facts show the benefits possessed by them, people and businesses continue to doubt their functionality. However, attempts to clarify the misconceptions about e-signatures and large scale adoption could pave the path for a future in which paper is no longer needed for business documentation.
Surely seems like a path towards a greener and better future, doesn’t it? Share your thoughts in the comment section below on it. If you have any doubt in your mind regarding the use of electronic signature, just mention it below and we’ll guide you through all the way.