Digital signatures greatly reduce the time spent during transactions. The signature serves as a fingerprint for the buyer, whether they are in business-to-consumer (B2C) or business-to-business (B2B). It helps when the buyer is seeking a quote or an estimate on a certain product or service.
Allied Market Research noted that the global electronic signature market has grown from $517 million in 2015 to a projected amount of $3,440 million in 2022. Some relevant industries include healthcare, finances, insurance, education and telecommunications. In short, digital signatures can affect every possible business.
When you have the functionality for your website, it creates greater flexibility for visitors and consumers to make purchases or request quotes. Business Insider predicts that the market for digital signature technology will grow to $9,073.1 million by the year 2023. While DocuSign is one of the leaders in the field and fairly well known, more competitors can emerge with advanced features and security.
What Are Digital Signatures?
A digital signature is one that encrypts a customer’s signature with a code that others cannot duplicate. They are a subset of electronic signatures.
Having this form of signature mitigates the amount of potential for errors with important documents. It also reduces the chances of fraud or changing agreements. With paper documents, signatures can be forged, and the parties may not agree on the processes or exchange of goods and services. They automate cash flow relevant to the transactions.
Some parties also have an incentive to change agreements after receiving signatures. In some cases, such a change does not count as forgery or breach of contract. One such example is in the movie The Founder, about how Ray Kroc acquired the McDonald’s brand and name from the brothers who founded it in the 1950s. After their partnership turned sour, Kroc offered to pay a lump sum for total ownership. In the film, The McDonald brothers demand $2.7 million dollars, as well as 1% of annual profits in royalties and their original store to give to their loyal employees. Kroc seems to agree, only to renege on the royalty agreement on paper. In their final meeting, Kroc only offers a handshake deal about the 1% of annual profits, though he pays the lump sum without any fuss. He makes the brothers sign because the other option is to fight in court.
Having a digital record ensures that a neutral party has set appropriate standards for repeatable processes. A vested party cannot negotiate at the last minute and offer a handshake agreement. Internet storage also allows business owners to retrieve and cite the terms listed to prevent sudden changes in terms or transactions.
Digital signatures, when done properly, have a specific protocol — a public key infrastructure (PKI) that requires the provider to create a public and a private key. PKIs set the standards for every part of the signature process.
These are sets of numbers that a mathematical algorithm generates for a unique user, encoded with a cipher. PKIs require the keys to be stored safely and securely so that would-be scammers cannot use them. A certificate authority (CA) can allow for secure storage of these unique numbers.
The CA releases a digital certificate that has the public key. This verifies that a specific organization owns the public key and is thus free to create a digital signature. Even so, the certificates have strict requirements: a trusted authority must generate them, and they have a limited time window. This prevents potential abuse of public keys.
The algorithm encrypts the relevant data when a user signs a document. A private key generates the signature, marked with the time. An authorized party receives the public key. The public key must be able to decode the signature after the other party receives a copy of the document. If it cannot, then the signature is declared invalid.
Different countries have various standards and technological options for digital signatures. Both the European Union (EU) and the United States accept electronic signatures as legal and binding. The EU passed the EU Directive for Electronic Signatures in 1999, while the U.S. did the same with the Electronic Signatures in Global and National Commerce Act (ESIGN) in 2000. Regulations are still evolving along with new technology.
Implementing A Functionality For The Signature Process
Normally, a B2B e-commerce owner would have to ask a customer to print out a digital document, sign it by hand, and scan it to email or send it via post. This can prove inconvenient, especially if the store lacks physical locations in the customer’s area. Owners would rather leverage conversions and allow for fair transactions at the same time.
Websites such as DocuSign can provide these as a third party, but digital signature providers or certificate authorities cut out that extra step. By national and European law, they have to meet PKI standards. Having a standard widget can prevent potential issues.
As an e-commerce store owner, especially in B2B, you have to provide three key aspects when conducting a transaction with another party: security, system availability and ease of use. Digital signatures can provide all three, according to the Electronic Signature & Records Association. Everyone can use electronic signatures, and digital ones certainly provide security.
When you implement a digital signature functionality, you also centralize customer data. Rather than see a redirect to a third-party certificate authority, the customer can simply enter relevant information: their name, the date and the company they represent. The widget demands minimal effort, increasing the convenience for the customer.
The right functionality can also work on multiple e-commerce platforms: BigCommerce, Shopify, PrestaShop and others. This contributes to system availability. Digital signatures will help with remote B2B e-commerce, reducing the amount of paperwork and errors.
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