eSignature vs Digital Signature: What’s the Difference?

As technology improves, so do the means by which documents can be signed. Sending signed contracts via fax is obsolete, with paper-based signatures not far behind. Scanning a hard copy of a signed document to send an image of that document seems positively quaint in this day and age.

That’s because electronic signatures are now easily available and are an improvement over traditional pen-and-paper signatures in almost every way. But it is important to remember that not all eSignatures are the exact same thing—there are also digital signatures.

The difference between eSignature vs digital signature is a key piece of knowledge when updating your processes and workflows to include electronic signing. Each has its place in the modern world, but your business functions may not require both at all times.

Defining the Digital and Electronic Signature Difference

Though the two terms are regarded by many as synonymous, there are some key differences between the two types of signature. There is often overlap between the two, but for now, let’s look at what they are and how they differ.

The eSignature

When it comes right down to it, an eSignature definition really is not complicated. An electronic signature, or eSignature, is any representation of a person’s signature made electronically. Basically, if you sign a document using an electronic device instead of putting pen to paper, you have made an eSignature.

This does not necessarily have to take the form of a written out script signature. It may be typing your name, typing your initials, checking specific boxes, or any combination of these. There is no one way to sign electronically.

Using an eSignature for a contract signing indicates that the person who has signed it has read and agrees to the terms in that contract—the same as a so-called wet-ink signature.

The Digital Signature

A digital signature is used to ensure document security. While an eSignature is a representation of a person’s signature made electronically, a digital signature uses further means to identify a user and to ensure that identity is accurate.

The real crux of the eSignature vs digital signature comparison is that subtle difference in function. The eSignature can be an aspect of a digital signature, but a digital signature will go further in authenticating who is interacting with a document.

A person’s digital signature may be built out of a combination of factors such as multi-point identification using email and a phone number as well as an identifying number like the user’s Social Security number, a specified username and password, biometric factors, or even a specific IP address.

So, a digital signature is not exactly an eSignature alternative—it is a tool to confirm the identity of the person interacting with a document and can include an eSignature as a part of that confirmation.

Which Is Better?

This question is not actually the right question to ask when it comes to looking at the eSignature vs digital signature debate. There isn’t really a debate. Neither is “better” than the other because they don’t necessarily serve the same function.

An eSignature is basically the concluding part of a contract or document. It signifies that the contract has been read and the terms are accepted or serves to confirm that the signatory has completed the actions specified in a non-contract document such as an inspection checklist.

Meanwhile, a digital signature includes a level of encryption that an eSignature does not always require. A digital signature can be used to identify a user to ensure that they have the required permissions to read or edit an important document or project.

Again, an eSignature may be used as part of a digital signature. The digital signature can be used to confirm the identity of a person who then signs their name on a legally binding contract. 

In more concrete terms, what does that look like?

A Potential Example

Let’s say that two companies are negotiating terms to work together. Both companies have people that would have permission to propose changes to the contract that will outline each party’s commitments to the other.

In order to create permissions within a document management system for both internal and external stakeholders, you will utilize some form of identity confirmation—that is using a digital signature.

This will ensure that only qualified people will view the developing contract and only recognized parties will be able to propose changes to that contract. And the way you recognize that each user is qualified is through a digital signature protocol.

When a proposed change to the contract is approved, that approval can be demonstrated with an eSignature. And when it comes time for the final contract to be signed by both parties, eSignatures will again be utilized.

So you can see that it is not a matter of eSignature vs digital signature. They both work together to ensure that a person is who they say they are and that terms in a document are agreed to.

Finding the Right Signature Solution

So, how do you find the solution to your digital and electronic signature needs? What do you need to look for?

You want software that can integrate with your workflows and processes seamlessly—and perhaps even allow you to streamline them further. If your organization follows best practices for your document management system, chances are good that you already have steps related to digital signatures.

With an eSignature solution like Dropbox Sign, you get software that will compliment your digital signature protocols. The last thing you want from your eSignature software is for it to undercut your digital signatures, after all.

Dropbox Sign (formerly HelloSign) interfaces with programs and applications designed to create, send, and store documents. It allows you to save commonly used templates and automatically populate relevant information fields while flagging every field that requires a signature.

That last part is important in an eSignature solution because it can help prevent an incomplete document from being submitted. 

Some eSignature options also help establish digital signatures as well. The key is for you to do your research into the solution that is right for you. What program will give you the functionality you need for the number of users you require—and which solution is scalable enough to keep up with your future growth.

The eSignature vs digital signature argument presents a false dichotomy. Both tools work best in conjunction with each other to create documents and contracts that reflect accurate information and requirements of the signatories.

Putting the eSignature vs Digital Signature Debate to Rest

The fact of the matter is that eSignatures and digital signatures are designed to work hand-in-hand. Together they provide a means by which the identities of signatories can be more solidly verified than would be possible with a pen-and-paper contract.

Think about it—if you send a contract to someone by courier or mail, you have no way to actually confirm that that person has read and understood the contract before signing it and sending it back. You can’t even really confirm that the right person signed your contract!

A digital signature lets you know that the person who has accessed the electronic document you’ve sent is the person who is meant to see it. Their eSignature then confirms that the right person agrees to the material in the document—giving you the assurance that your work with that person or organization is in good standing.

And don’t forget that having digital signatures act in this way gives you an audit trail of every change made to a contract and even ensures that no one changes that contract after it is signed.

These are tools that are not alternatives to each other but that are best used to compliment each other. The digital signature confirms a signatory’s identity and the eSignature confirms the signatory’s agreement to the terms and content in your contract or other document.

Find Your Solution

You want your signature software to integrate seamlessly with your content management system. An installation that disrupts your day-to-day business operations will frustrate your team and delay your ROI on this solution.

And if you are putting this software in place as part of a larger upgrade of your document management, such as a cloud migration or a switch to an entirely new platform for document management, you definitely want to ensure that your transition goes smoothly.

TEAM IM has collected a group of experts with extensive experience in all areas of document management—including an unparalleled understanding of the ins and outs of the so-called eSignature vs digital signature debate.

We take the time to understand your processes and your needs going forward to help you implement optimized technology solutions. With TEAM IM, your digital signature and eSignature tools will be installed, integrated, and initiated without interrupting your team’s work.

The time is right to upgrade your eSignature and digital signature solutions. Contact TEAM IM today to see how your day-to-day business can be improved with the right technology.