Studies show that among US companies alone, 30 billion paper documents are copied or printed every year. The associated cost for each document is estimated at $6.50. Five hundred documents are signed by the average authorized employee each year, which means that the total annual cost of using paper documents $3,250.
Signatures have been the most accepted means of authentication since ancient times. During the Roman Empire, a combination of seals and signatures were recognized as the primary source for document and legal contract authentication. In the 1830s, electronic communications became legally recognized “electronic signatures” when the telegraph and Morse Code were invented. In 1976, Martin Hellman and Whitfield Diffie introduced public key cryptography, wherein cryptographic keys were first distributed over an unprotected public network. The first electronically signed document was an agreement between two nations – a Joint Communique signed by Ireland and the United States in 1998.
What is an electronic signature or e-signature?
There are different definitions for this term, but for the purpose of US law, the US Code defines it as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
Why are businesses using electronic signatures?
- Electronic signatures help cut costs.
Studies show that among US companies alone, 30 billion paper documents are copied or printed every year. The associated cost for each document is estimated to be $6.50. Five hundred documents are signed by the average authorized employee each year, which means that the total annual cost of using paper documents per employee is $3,250.
- Electronic signatures are good for the environment.
The reduction of paper usage will not only cut down operational costs, but will also help save our environment. For every person who uses e signatures, the savings is equal to ¾ of a barrel of oil, ½ of a tree, or 150 pounds of carbon emissions per year.
- Electronic signatures help reduce fraud.
When documents are signed electronically, the integrity of the content is guaranteed. E-signatures also enable real-time verification of the handwritten signature as opposed to a pre-defined biometric profile. Any manipulation within a document that involves an e-signature will automatically result in making the signature invalid.
- Electronic signatures help increase customer satisfaction.
Turnaround times are accelerated with the use of electronic signatures because you don’t keep your customers waiting while you search for contracts or forms. Additionally, adding an electronic signature to a document is just like signing on paper. There is no need to change your customers’ habits, and they are assured that even with remote handling all their documents are secure.
- Electronic signatures give entrepreneurs more time to increase sales.
Because workflow is much faster with the use of electronic signatures, processing times are reduced and sales people and consultants have more time to spend on getting new business. This can significantly increase the company’s revenue.
E-Signatures and Mobile Devices
Many business owners have come to realize the importance of using e-signatures in business. In fact, some businesses have even adapted this signing process for the smaller screens of mobile devices. If the transaction involves straightforward, simple sales contracts, a mobile e-signature is ideal. The customer sees and agrees to what exactly what is being purchased on the spot, and this allows salespeople to work more efficiently. For lengthy documents however, especially those that have several form fields that require considerable interaction with the client, a PC format is more suitable.
How Legitimate are E-Signatures?
As for the legitimacy of e-signatures, you need not worry. In 1999, the European Union passed the EU Directive for Electronic Signatures, and on the 30th of June, 2000, US President Bill Clinton signed into law the Electronic Signatures in Global and National Commerce Act (ESIGN), which signified that all signed electronic contracts and documents are as legally binding as a paper-based contract.