You would rarely see anyone go through the stress of printing, signing, scanning, and emailing documents anymore, when you can do it from the comfort of your home. From closing a business deal, getting internal approvals, or filing tax documents, most people do it digitally.

However, because of this increased adoption of online signatures, most of us use e-signature and digital signature interchangeably, assuming that they mean the same thing. When in the real sense, they don’t. Yes, they are both used to sign documents online, but there are some key differences, especially in how they work, how secure they are, and when to use them.

In this guide, we’ll look at both types of signatures in a simple, no-jargon way that can help you confidently choose the right fit.

What is an E-Signature?

An e-signature or electronic signature is the digital equivalent of putting pen to paper. It’s a broad term used to explain any mark or process for indicating agreement electronically, such as typing your name, uploading a scanned signature, clicking an “I agree” button, or using a stylus to scribble your name on a touchscreen.

The common use cases of e-signature include:

• Signing employment contracts
• Approving internal memos
• Completing online registration or onboarding forms
• Accepting terms and conditions

E-signatures are legally recognized in many countries and are supported by laws such as the ESIGN Act (USA), UETA (Uniform Electronic Transactions Act), and eIDAS Regulation (EU). They prove your intent and consent, or identity, which makes them valid and enforceable in most courts. However, they don’t often have advanced security measures like authentication.

What is a Digital Signature?

Digital signatures are not just electronic versions of your name; they are the mathematical and encrypted versions that are way more secure. They use cryptographic algorithms to bind the signer’s identity to a document. They work by developing a private key for signing and a public key for verification, and both keys are issued by a trusted Certification Authority (CA). 

Your digital signature is unique to you and the document; if someone tampers with the document, the digital signature instantly becomes invalid. It also gives you more room to do more secure transactions because it provides timestamps, audit trails, and identity verification.

The common use cases of digital signatures include:

• Government-issued documents
• Banking and financial agreements
• Health records and insurance claims
• Intellectual property, patents, and legal filings

PS: Not every digital signature is an e-signature, and not every e-signature is a digital signature.

Key Differences: E-Signature vs. Digital Signature

When Should You Use an E-Signature?

E-signatures are ideal for signing everyday agreements. They are very efficient, simple to use, and widely accepted for recording intent and storing evidence of the agreement.

For instance, if you are managing standard business operations and don’t require military-grade security, then e-signatures are your go-to tool to get the job done fast. You can sue them for internal HR approvals, sales agreements, NDAs, onboarding paperwork, customer service forms, and Terms and Conditions acceptance on your website.

When Should You Use a Digital Signature?

Digital signatures are best for cases where even the slightest tampering or fraud can have severe consequences. So, if your business or organization handles sensitive information in a regulated industry, you need a digital signature. For example, you can use them for credit applications, large financial transactions, government filings and official records, healthcare documentation (HIPAA compliance), intellectual property, and R&D documentation.

How to Implement E-Signatures and Digital Signatures in Your Business

You may not need separate platforms to manage both signatures. Platforms like Formplus allow you to use both. Here is how it works:

• E-sign field: Once you enable E-Sign in Formplus, it captures digital signatures from the respondent, collecting their email address and full name as verification information. This helps you maintain your document integrity in storage. You can also request an e-signature by simply asking respondents to type out their name or add an image as their signature (this wouldn’t require the E-SIGN feature)
• Store/Print Agreement: After enabling E-SIGN, you’ll receive a copy of your respondent’s submission with an audit trail. You can also enable notifications so you know when there’s a new submission, e.g., client signing off on a proposal.

Conclusion

Both signatures are very helpful for individual and business use; what really matters is knowing which to use and when to use them. 

E-signatures are fast, simple, and ideal for most day-to-day business tasks. Digital signatures provide an extra layer of security, identity verification, and tamper-proofing, which are required for protecting sensitive or high-value documents. So, if your business requires speed and simplicity, then both e-signatures are a great fit for you.

However, if you are handling regulation-heavy workflows, legal exposure, or large sums of money, then digital signatures are your safest bet in terms of security.

Ready to explore the ease of use? Use E-SIGN by Formplus.