How do E-signatures Work?< How do E-signatures Work?<

How do E-signatures Work?

Traditional “wet” signatures have been with us for thousands of years. They come in many different forms, including stamps, marks, signs, and seals. However, they’re quickly becoming outdated as new technology reshapes our world. New ways of signing are simpler, easier, and more convenient.

It’s now easier than ever to accept online signatures on important documents, like mortgage or legal agreements. With a few clicks of a button, you can close on a home, open a financial account, and even accept a new job — all thanks to electronic signatures.

Pro Tip

Collect signatures on any device for free with Jotform Sign.

An electronic signature, or e-signature, is the digital form of an ink signature. E-signatures are convenient, easy to use, and both time and cost effective; no more wasting money on mailing overnight express documents or sending couriers across town to retrieve a signature. They also create less waste and are traceable, time stamped, and more secure than traditional signatures.

What’s more, e-signatures are the future that citizens and consumers want, so it’s important to understand how they work. (In fact, some pundits forecast the electronic signature market will grow to $20.4 billion by 2027, due in large part to the COVID-19 crisis.)

But what exactly is an electronic signature? Read on for a guide to the technology behind the electronic signatures, also a breakdown of their legality, benefits, most popular tools, and much more.

E-signatures meet automation

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Digital signature technology

No matter what industry you work in — government, law, healthcare, finance, or sales — there’s a good chance you use contracts, agreements, and forms on a daily basis. By including e-signatures in your paperwork, you can

  • Streamline workflows
  • Boost productivity
  • Shorten sales cycles
  • Reduce costs
  • Broaden social reach
  • Get paid faster
  • Enhance data security
  • Optimize the customer experience

However, before delving too deeply into the benefits of e-signatures and the various e-signature tools you can use, let’s take a quick look at the distinction between digital and electronic signatures. Though they’re often referenced interchangeably, the two types of signatures are distinct, especially when it comes to how they’re used.

Think of a digital signature like a digital fingerprint. It’s unique to each signer and uses public key infrastructure (PKI) to encrypt and authenticate data through transmissions. PKI generates and encrypts two long numbers (or keys) — one public and one private — that create a time-stamped digital signature.

Say, for example, you’re selling your home. When you electronically sign the seller’s agreement, a signature is created with your private key. Then the buyer receives a copy of your public key with the signed paperwork. 

If the buyer can’t decrypt the signature using the public key, one of two things has happened: Either the digital signature isn’t actually yours or the document has been tampered with since you signed it. In whichever case, the signature is invalid. 

Though complex, digital signatures enable better authentication, data integrity, and security than e-signatures. E-signatures, however, are more common. They’re also legally binding in many countries. 

In the United States, for example, the E-sign Act states that electronic signatures are binding as long as all parties agree to use them. In addition to the E-sign Act, the Uniform Electronic Transactions Act (UETA) outlines state use of e-signatures. Similar legislation exists in the European Union. (Pro tip: Consult an attorney for any additional questions you may have regarding your specific online document.)

In the United States, you can use an electronic signature to sign contracts, which largely speeds up the approval process. (Courts even allow you to present them as evidence in a court case.) The document simply needs to meet these requirements:

  • Demonstrate that the signer had definite intent to sign. (To illustrate this, provide a clear option not to sign somewhere on the document.)
  • Prove the signer consented to conduct their business electronically. Most electronic signature solutions require that you give consent before signing, while others might provide the option to complete the form on paper.
  • Clearly attribute the signature. This could include an email trail, IP address, or time stamp. (Some e-signature software providers have a two-step identification system for signers. Although this creates an extra step for the signer, it creates a higher standard of attribution.)
  • Associate, or directly connect, the signature with the document being signed.

In addition to being legally binding, e-signatures also provide simplicity, security, and convenience — all at a low cost.

E-signatures can be especially helpful when you need the following:

  • A simple and intuitive solution. Streamline your HR services with electronic signatures. Consider using them on time-sensitive documents, like time sheets, tax forms, and onboarding forms for new hires.
  • High-level security. When dealing with highly personal information, you need 100 percent assurance. This could include retention or fee agreements, confidentiality agreements, or power of attorney agreements. In these cases, an e-signature could provide strong insurance through an auditable trail.
  • Convenience and speed. Legal documents, such as class action communications, are often distributed to hundreds or even thousands of people. Collecting e-signatures could save you hours or days of work. In retail, you could use speedy e-signatures to make sales, sign purchase orders and invoices, and keep business moving.
  • To lower costs. Cutting expenses is one of the most important elements in running a business. With e-signatures, you can open, maintain, or close accounts at lower costs by eliminating shipping fees. Similarly, insurance companies can cut the costs of claim assessments or policy agreements by having customers sign online.

Collecting signatures via online forms is easy, quick, and convenient. Instead of sending out forms and waiting for them to be sent back, you can collect signatures from anyone at any time.

So, what can you do if you want to capitalize on the convenience of e-signatures? First, find the right e-signature solution for your organization. Here are some of the most popular e-signature tools.

To find the best e-signature tool for your organization, you need to first consider your e-signature needs. (You can also read reviews and comparisons of electronic signature software on sites like AlternativeTo, Capterra, G2, or TrustRadius.)

When selecting an e-signature provider, there are a few factors you should take into account:

  • Price. Some providers offer products exclusively for business, which can be expensive. Others cater to lower budgets. Most offer multiple products and services as well as free introductory trials.
  • Security. Check the technical specifications the provider uses for identification and authentication. Not every company will use digital signatures. Also, consider customer service availability — who is available to fix your problem if and when one occurs?
  • Experience. Has the provider worked with companies of your size in your industry? Read reviews from its customers.
  • Integration. How will the e-signature service work with your existing software? This could have a significant impact on your ability to streamline your workflow.

Also, be sure to look for solutions that include the features your organization is looking for. Depending on your business, you might need the following:

  • Custom branding. It’s important to adhere to your brand identity, even when signing documents.
  • Scalability. The size of your company and the number of users who will need to use the service matter.
  • Regulatory compliance. You want to remain above board by following regulations and  following the laws that govern your industry.
  • Reporting, workflow visualizations, and dashboards. Managers can use them to track progress.
  • Notifications and reminders. You don’t want your processes to stall because one person has forgotten to approve or sign a document; these can help combat that.
  • Mass signatures. Send out signatures to a large number of people in the time it would take to sign for just one.

There are many e-signature providers available, and several will likely offer what your organization is looking for. To find the best fit, consider each solution’s features and weigh them against your business needs.

Here are some of the most popular e-signature tools on the market.

Microsoft 365

As one of the most widely used business tools in the world, it’s no surprise Microsoft 365 is also one of the most popular e-signature tools.

To insert a signature line in Microsoft 365 programs, simply follow these steps:

  1. Place your cursor where you’d like to insert a signature line in the document.
  2. Click Insert.
  3. Click the Signature Line list, which is located in the Text group.
  4. Click Microsoft Office Signature Line.
    • In the Signature Setup dialog box, type the information that will appear beneath the signature line, like the signer’s name, title, and/or email address. (You can even include signee instructions if you’d like, such as “Before signing the document, verify that the content is correct.”)
  5. Select one or both of the following checkboxes:
    • Allow the signer to add comments in the Sign dialog box
    • Show sign date in signature line

And to remove signature lines from Microsoft 365, simply

  1. Open the document or worksheet that contains the electronic signature you’d like to remove.
  2. Right-click the signature line.
  3. Click Remove Signature.
  4. Click Yes.

You can also remove a signature by clicking the arrow next to the signature in the Signature Pane and then clicking Remove Signature.

Adobe Acrobat Reader

Adobe’s Portable Document Format (PDF) is a common format for fixed-layout documents. Like Word, Adobe PDF has added a range of capabilities since it was first introduced to the market in 1993, including the ability to electronically sign a PDF file for authentication.

If you’re a Windows user, you’re probably familiar with PDF readers. These computer programs allow you to open PDF files, or files with the .pdf file extension. The most popular option is Adobe Acrobat Reader.

To add an electronic signature to a PDF, follow these steps:

  1. Open the PDF file in Adobe Acrobat Reader.
  2. Click on Fill & Sign in the Tools pane on the right.
  3. Click Sign, and then select Add Signature.
  4. A popup will open with three options: Type, Draw, and Image. Select whether you’d like to type your name in the field, draw your signature, or browse and select an image of your signature.
  5. Click the Apply button.
  6. Drag, resize, and position the signature inside your PDF file.

Knowing how to sign PDF documents will give you an edge in today’s online world. For further information on how to add an electronic signature to a PDF using third-party tools, refer to Jotform’s complete guide to editing PDFs.

DocuSign

Founded in 2003, DocuSign pioneered some of the key technologies used in e-signatures. Today, the company has more than 475,000 customers and hundreds of millions of users across the world.

DocuSign works on both Mac and Windows, and integrates with Google, Salesforce, and many other apps. DocuSign offers excellent security and encryption solutions. It’s the only provider to be ISO 27001 and SSAE 16 certified. In addition, DocuSign also complies with the xDTM Standard — the transaction management standard for an open, digital world.

This all adds up to a first-class service at an affordable price. Individuals or casual users pay $10 per month. The standard plan for multiple users is $25 per user, per month. If you’d like to try DocuSign, there’s also a 30-day trial.

Adobe Sign

In 1999, Adobe introduced some of the first digital signatures in Adobe Acrobat and Adobe Acrobat Reader. Since then, the company has worked with experts and certificate providers across the industry to create an open standard.

Today, Adobe is the “first global vendor to deliver open, standards-based digital signatures for web and mobile.” The company has worked with experts in the Cloud Signature Consortium to set up a new global standard.

Adobe Sign provides world-class compliance and includes built-in authentication features. It’s also Microsoft’s preferred e-signature solution, so you can take care of signature tasks without ever leaving Microsoft 365.

Pricing for a single user starts at $12.99 per month. For teams, you’ll need to sign up for a team plan, which starts at $14.99 per person, per month. A free 30-day trial is also available.

OneSpan

Formerly eSignLive by VASCO, OneSpan emphasizes its history of working with governments and regulated industries. Founded in 1991, OneSpan has more than 10,000 customers, including more than half of the world’s top 100 banks. Customer reviews mention ease, flexibility, and security as some of the software’s positive qualities.

When it comes to maintaining trust and achieving the highest completion rates possible, brand consistency is a large concern for big organizations. For a reasonable cost, OneSpan allows companies to deliver highly personalized digital experiences that put their brands front and center.

OneSpan offers a free online demo for users to try out. After that, it costs $20 per user, per month.

Jotform Sign as an e-signature solution

Before choosing any of the above e-signature tools, consider Jotform Sign.

Designed for small and midsize businesses, this powerful e-signature solution is easy to use, automated, cost effective, and, best of all, both E-sign and UETA compliant. You can use Jotform Sign to create legally binding signature flows, upload documents, and add and assign fillable fields to different signers.

What’s more, with Jotform Sign, you can

  • Turn your existing documents into signable ones or choose from a library of 600-plus premade document templates
  • Build a document once, send it multiple times to multiple signees, and track it all — from one centralized location
  • Automatically find all fillable fields in all types of PDFs (Most e-signature solutions can only detect fields on fillable PDFs.)
  • Automatically send completed, signed documents to cloud storage systems (e.g., Google Drive, OneDrive, and Dropbox)
  • Automatically collect multiple signatures with just one link
  • Embed forms on your website to collect signatures

Here’s how to create a signable document using Jotform Sign:

  1. Click Create Form on the My Forms page. (Note: If you’re new to online form builder Jotform and don’t yet have an account, it’s free to sign up.)
  2. Next, click the Create Signable Documents option.
  3. Click either Upload Document or Use Template.
    • If you click Upload Document, either drag and drop your document onto the screen or click Upload Document. (If you’re simply trying out Jotform Sign and don’t yet have a document to upload, click Try Demo Document to Jotform Sign’s demo document.)
      • Select Create Signable Document after your PDF has been uploaded.
    • If you click Use Template, simply choose one of Jotform’s 600-plus premade templates and click Use Template again.

That’s it. You’ve successfully created a signable document with Jotform Sign.

Now for the fun part.

Using the drag-and-drop Jotform Sign Builder, you can

  • Add fields to the document, as well as edit and resize them
  • Add, edit, assign, and delete roles (e.g., “me,” “contractor,” “signer 1,” “John Smith.” etc.)
  • Customize the document name, as well as the email subject and body that will be sent to all recipients
  • Send the document to all signees, either in parallel or in a specific signing order
  • Set automatic reminders or signing deadlines

Building and sending signable documents is easy with Jotform Sign. Once you create a document, you can send invitations to users to sign it. 

You can view and track document status in your Sign Inbox, which will show each signing flow on the left under the All Documents tab. As you click through the other brightly colored tabs — Waiting for My Signature, Completed, and Canceled — you’ll see where everyone is in the signing process. (Pro tip: Feel free to send reminder emails from here to keep the signing process moving forward.)

Finally, once the signing flow is complete, all parties will receive both a PDF of the signed document via email and an audit trail of the document’s signing journey, including its title, number of pages, and history (e.g., when the flow started, when the document was viewed, and when the flow ended).

Another critical element to note about Jotform Sign is that it’s actually part of Jotform’s existing suite of products. Jotform is a fully customizable, comprehensive, and completely code-free online form builder, whether you want to use one of its 10,000-plus premade forms or create one from scratch.

Jotform Sign enables you to build forms, tables, apps, workflows, and e-commerce stores in minutes. So while Jotform Sign is a standalone product, it also integrates with other Jotform platforms, including Jotform Apps, Jotform Tables, and Jotform Approvals.

With Jotform, data privacy and security are top priorities. All form data is protected with a 256-bit SSL connection. In addition, Jotform is California Consumer Privacy Act (CCPA), General Data Protection Regulation (GDPR), and Payment Card Industry (PCI) compliant. If you’re on a Gold or Enterprise plan, you can also take advantage of optional Health Insurance Portability and Accountability Act (HIPAA) compliance.

Users on Jotform’s free Starter plan can collect 10 e-signatures. To collect more, you can upgrade to one of the paid plans, which start at $34 per month.

Why e-signatures are essential

Signatures have come a long way since early scratchings on cave walls. As history and technology have shaped society, our signatures have changed as well.

Electronic signatures have countless advantages over wet signatures — they’re fast, environmentally friendly, convenient, cheap, and traceable. E-signatures are used in both personal and professional settings and are gaining popularity, thanks to global commerce, security concerns, and environmental awareness.

While adapting to new technology, like e-signatures, can be challenging, it can be incredibly rewarding, too, as it helps broaden your reach and allows more people to get excited about your organization. Including e-signatures in your day-to-day operations creates faster, more cost-effective processes — and a much more streamlined, organized work life.

Jotform Sign Product Image

AS ALWAYS, CONSULT AN ATTORNEY BEFORE RELYING ON ANY FORM CONTRACT OR  CONTRACT TEMPLATE. THE CONTENT ABOVE IS FOR INFORMATIONAL PURPOSES ONLY.

This article is originally published on May 30, 2019, and updated on Dec 16, 2022.

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