What are the different types of electronic signatures?

Electronic signatures, or e-signs, have become widely used in the modern digital age due to the necessity for quick and safe document signing methods. Businesses and individuals alike rely on these types of electronic signatures for their convenience, efficiency, and security benefits.

However, not all e-signs are created equal. 

Different types of electronic signatures cater to varying needs and legal requirements. Knowing these kinds of issues can assist people and companies in selecting the best solution for their particular use cases. 

This blog will examine the different types of electronic signatures, features, and uses.

Types of e-signature styles

1. Simple electronic signatures (SES)

Simple Electronic Signatures (SES) are the most basic type of digital signature. 

These can be as easy as putting a name at the end of an email, clicking the “I agree” button on a website, or adding an image of a handwritten signature to a document. SES are easy to use and require minimal technological infrastructure.

Features:

• Easy to implement and use
• No unique technology is required
• Quick to apply

Applications: SES is suitable for low-risk transactions where the signature’s authenticity is not critically essential. Examples include:

• Internal company documents
• Low-value contracts
• Consent forms

Limitations: While SES are convenient, they offer the least security and are the easiest to forge or tamper with. They may not hold up well in legal disputes where the signature’s authenticity is challenged.

2. Advanced electronic signatures (AES)

Advanced Electronic Signatures (AES) offer a higher level of security and authenticity compared to SES. AES are uniquely linked to the signer and are capable of identifying them. 

They are made with the signer’s exclusive control and a high degree of confidence, utilizing electronic signature creation data. AES must also be connected to the signed data in a way that makes it possible to identify any changes made later.

Features:

• Unique to the signer
• Capable of identifying the signer
• Ensures data integrity (any changes to the signed document are detectable)
• Often involves the use of digital certificates

Applications: AES are appropriate for transactions where a higher degree of security is needed and where it is necessary to confirm the signature’s legitimacy. Examples include:

• Financial transactions
• HR documents
• Medium-value contracts

Limitations: Despite being more secure than SES, AES requires more advanced infrastructure and technology, including Public Key Infrastructure (PKI) and digital certificates. This can make them more complex and costly to implement.

3. Qualified electronic signatures (QES)

Qualified Electronic Signatures (QES) provide the highest security and legal assurance. They are a type of AES that meets additional requirements specified under the eIDAS (Electronic Identification, Authentication, and Trust Services) regulation in the European Union. 

A qualified certificate from a reliable service provider is the foundation for QES, generated using qualified electronic signature-generating equipment.

Features:

• Provides the maximum level of legal standing and security.
• Based on an accredited certificate that a reliable service provider has supplied.
• Created with an approved electronic signature generation tool.
• It is legally comparable to a handwritten signature in the European Union.

Applications: QES are used in high-risk or high-value transactions where the highest level of security and legal assurance is required. Examples include:

• Legal documents
• High-value contracts
• Regulatory compliance documents

Limitations: Implementing QES is the most complex and costly of all digital signature types. It requires a robust infrastructure, including qualified electronic signature creation devices and certificates from trusted service providers.

4. Digital signatures

A digital signature is a kind of electronic signature that uses cryptographic techniques to provide a very high level of security.

They are widely used in various industries and are often synonymous with AES or QES, depending on the context and the legal requirements. To ensure that a digital signature is both legitimate and unchangeable, it is encrypted and decrypted using a pair of keys (public and private).

Features:

• Uses cryptographic algorithms
• Provides a high level of security and integrity
• Typically involves PKI and digital certificates
• Can be verified independently of the signer

Applications: Digital signatures are suitable for various applications with critical security and authenticity. Examples include:

• Software distribution
• Secure communications
• Electronic transactions in banking and finance

Limitations: Digital signatures require a comprehensive PKI infrastructure, which can be complex and expensive to set up and maintain. Additionally, users need to understand how to manage their cryptographic keys securely.

5. Clickwrap signatures

Clickwrap signatures are a type of electronic signature commonly used in online transactions. To accept the terms and conditions of a contract, the user must click a button or check a box. 

This type of digital signature is prevalent in software licensing agreements, online purchases, and website terms of service agreements.

Features:

• Easy to implement and use
• Requires user action (clicking a button or checking a box)
• It can be integrated into online forms and web applications

Applications: Online agreements where the user must accept terms and conditions before continuing are best served by clickwrap signatures. Examples include:

• Software licenses
• E-commerce transactions
• Website terms of service agreements

Limitations: While clickwrap signatures are convenient, they may not provide the same security and legal assurance as more advanced e-signatures. They rely on the user’s action to signify agreement, which can be disputed more quickly than a digital or qualified electronic signature.

6. Biometric signatures

Biometric signatures use the signer’s unique physiological or behavioral characteristics to create an electronic signature. This can include fingerprints, facial recognition, iris scans, or voice recognition. 

Biometric signatures are appropriate for sensitive transactions because they provide a high level of security and are challenging to forge.

Features:

• Based on unique physiological or behavioral traits
• High level of security and difficulty in forge
• It is compatible with additional security measures.

Applications: Biometric signatures are used when high security and non-repudiation are crucial. Examples include:

• Access control systems
• Sensitive financial transactions
• Identity verification processes

Limitations: Biometric signatures require specialized hardware and software for capturing and verifying the biometric data. Additionally, privacy concerns about the usage and storage of biometric data need to be addressed by adhering to data protection laws and implementing strong security measures.

7. Signatures with smart cards

Smart card signatures involve a physical card embedded with a microchip that stores the signer’s private key. 

A signature is created by inserting these cards into a card reader. Since the private key never leaves the smart card, it is impossible to copy or steal this kind of e-signature.

Features:

• Uses a physical card with an embedded microchip
• High level of security and critical protection
• Requires a card reader for use

Applications: Smart card signatures are commonly used in government and corporate environments where security is paramount. Examples include:

• Government-issued ID cards
• Employee access cards
• Secure corporate transactions

Limitations: The need for physical smart cards and card readers can add complexity and cost. Managing and distributing intelligent cards to all users can also be logistically challenging.

8. Certificate-based signatures

Digital certificates provided by a Certificate Authority (CA) are used in certificate-based signatures to confirm the signer’s identity. These certificates are stored in the signer’s computer or a secure USB token. 

When a document is signed, the issuing CA’s certificate generates a digital signature that can be independently confirmed by anybody they trust.

Features:

• Uses digital certificates for identity verification
• High level of trust and security
• Can be verified by third parties

Applications: Certificate-based signatures are suitable for high-trust environments where the signer’s identity needs to be verified by third parties. Examples include:

• Legal contracts
• Financial transactions
• Regulatory filings

Limitations: Obtaining and managing digital certificates can be complex and costly. Users must also understand how to handle their certificates securely to prevent unauthorized use.

9. Cloud-based signatures

Cloud-based signatures involve creating and storing digital signatures using a cloud service. The signer’s private key is stored securely in the cloud and used to sign documents when needed. 

This approach offers convenience and scalability, as users can sign documents from any device with internet access.

Features:

• Uses cloud services for signature creation and storage
• Convenient and scalable
• Accessible from any device with internet access

Applications: Cloud-based signatures are ideal for organizations with distributed teams or requiring flexibility in how and where documents are signed. Examples include:

• Remote work environments
• Global business transactions
• Document workflows in large organizations

Limitations: Relying on cloud services introduces concerns about data security and privacy. It is essential to select a reliable service provider that adheres to applicable security requirements and legislation.

Check out this video to compare simple, advanced, and qualified e-signatures.

Choosing the right e-signature

Selecting the right types of electronic signatures depends on various factors, including the level of security required, the legal and regulatory environment, the nature of the transaction, and the technological infrastructure available. 

Here are some key considerations:

1. Security requirements:

• For low-risk transactions, a Simple Electronic Signature (SES) may suffice.
• Advanced Electronic Signatures (AES) or Digital Signatures should be used for transactions requiring greater security.
• Qualified Electronic Signatures (QES) are the best choice for the highest security and legal assurance.

2. Legal and regulatory compliance:

• Different jurisdictions have varying legal requirements for e-signatures. Ensure that the chosen e-signature type complies with the relevant laws and regulations.
• In the EU, QES are legally equivalent to handwritten signatures under eIDAS.

3. Nature of the transaction:

• Consider the value and sensitivity of the transaction. High-value or high-risk transactions may necessitate more secure e-signature types.
• For online transactions, clickwrap signatures provide a convenient and user-friendly solution.

4. Technological infrastructure:

• Evaluate the available technology and infrastructure. Implementing AES, QES, or digital signatures may require additional resources such as PKI and digital certificates.
• Biometric signatures may require specialized hardware to capture biometric data.

Conclusion

E-signatures have revolutionized how we sign and manage documents in the digital age. Understanding the various types of electronic signatures, ranging from Simple Electronic Signatures (SES) to Qualified Electronic Signatures (QES), enables individuals and businesses to select the best option for their requirements.

Each types of electronic signatures offers a unique balance of convenience, security, and legal assurance, making it possible to find the right solution for any scenario. 

As technology advances, e-signatures will become increasingly important in enabling secure and efficient digital transactions.

Our free e-sign tool- Freesign, is at the forefront of this evolution, providing a versatile and reliable solution that adapts to the changing needs of individuals and businesses alike.