How many of you have completed an e-signature instead of the usual handwritten signature on a piece of paper to verify that you are in agreement with a specific set of statements or to approve action being taken?  Did you ever wonder how this works exactly?

One type of e-signature is simply signing your name on a screen, similar to handwriting on paper.  This is a common way of approving a business to charge your credit card for a purchase or to withdraw money from your bank account.  This is simply a digital recording of your handwritten signature.  This may work effectively for purchasing in a store, but it is not as effective for transacting business over the Internet or by e-mail.

Many companies are now taking a different approach to this essentially scanned signature approach since it’s not practical for most individuals to sign their name at home on a screen.  The concept is that the customer will visit a third party website that will verify his or her identity such as name, birthdate, social security number, driver’s license number, and/or other identifying information like an insurance policy number.  Once the customer is verified, a “private key”  or “digital certificate” is created, which is stored on that website.  The customer is also given information that is used later in the digital signature process, such as a name and password.

Then, at a later point in time, the customer can digitally sign a document. For example, they could sign an application for insurance or a statement that is needed to facilitate the purchase of insurance, like a statement that he or she is not a smoker.  The customer will be logged in to the business website and will be asked to sign the statement being submitted.  The customer will provide the information, i.e. name and password, they received from earlier in the process.  Once this information is validated, the transaction is completed with the digital signature attached.  No paper is needed, nor is any type of special screen for handwriting required.  These digital signatures are legally recognized in almost all countries and are acceptable substitutes for handwriting.

You can even set up your own digital signature for your use in signing Office documents.  An approach to this is located at this Microsoft site.

The e-signature process is usually pretty smooth, but it can sometimes be a challenge if the person has forgotten his name or password involved with the digital signature.  Sometimes the verification will have to be done again if this happens. What has been your experience with digital signatures? Would you prefer to use e-signature or sign the old-fashioned way?