eSignatures vs digital signatures: How are they different?

At first glance, eSignatures and digital signatures might seem like the same thing. However, that's not quite the case. Both let individuals sign legal agreements and other documents electronically, yet they do it in very different ways. We've cleared up these commonly confused terms below.

What is an eSignature?

Put simply, an electronic signature or eSignature is a way to sign a digital document. Think of it as a digital version of a physical signature - it's quick, easy and legally recognized in most places.

eSignatures are typically an electronic indication of consent, meaning someone authorizes an action or agrees to a document's terms, just as they would with a pen and paper. An eSignature can be as simple as typing their name, clicking an 'I agree' button or drawing their signature on a touchscreen.

In the U.S., eSignatures are legally recognized under the ESIGN Act, making them just as official as handwritten signatures. eIDAS rules provide similar legal recognition in the EU.

That said, security can vary depending on the method used. Simply clicking 'I agree' on a website, for example, isn't as secure as an eSignature that verifies someone's identity by sending a unique link or code to their email. Ultimately, eSignatures are best for your documents that need to be signed quickly and don't demand top-tier security.

What is a digital signature?

Digital signatures are a more secure way to sign documents electronically because they use a specific cryptographic technique called Public Key Infrastructure - or PKI, for short. It verifies the identity of the person signing and detects whether a document's been tampered with.

Here's how PKI works:

• Trusted organizations called certificate authorities verify the signer's identity.
• A digital seal encrypts a unique code to protect the document from tampering.
• Because the code is specific, the signer can't deny having signed the document. This is called non-repudiation.

Compared to eSignatures, digital signatures are well-suited for documents that require strong identity verification and tamper protection. Examples include Qualified Electronic Signatures (QES), which are digital signatures subject to strict EU regulations.

Key differences between eSignatures and digital signatures

Both signature types are legally recognized in most countries today. However, digital signatures provide stronger identity assurance and legal defensibility, making them a good fit for businesses in highly-regulated sectors such as finance, healthcare and government services. They are also the better option for companies that need high levels of security and compliance.

Here's a comparison table of both methods so you can see differences side-by-side:

When to use each

If speed and convenience matter the most, an eSignature is a good call. It lets people quickly sign your documents without printing and mailing paperwork to you.

Say you want an employee to sign an expense reimbursement form. An eSignature is fine here as the document probably won't contain much sensitive legal or financial information. The employee can sign it fast without the need for extra security measures.

If you're dealing with more high-stakes documents, such as contracts or other legal agreements in a regulated industry, a digital signature is the smarter option. That's because it not only verifies the signer's identity but also guarantees the document hasn't been altered in any way, which can lead to all kinds of consequences for your business.

Say you want an organization to sign a business partnership agreement that outlines different roles, responsibilities and financial arrangements. An eSignature won't provide the amount of security you need to verify a signer's identity or prevent unauthorized changes. In this case, opt for a digital signature instead, which ensures the agreement is completely tamper-proof and legally defensible.

Should you choose eSignatures or digital signatures?

At the end of the day, it comes down to your business's needs. eSignatures work well for everyday low-risk documents, while digital signatures offer additional identity verification and tamper protection for high-stakes or regulated agreements.

With Lumin Sign, you get both simple eSignature workflows and verified digital signature capabilities in one place, allowing you to choose the correct option based on your specific requirements.

Try Lumin Sign for free now.

Verified Digital Signing: The next step in eSignature security

While digital signatures provide strong cryptographic protection, Verified Digital Signing takes it further by binding cryptographically-verified identity credentials to each signature. This creates an additional layer of authentication that proves the signer is genuinely who they claim to be, not just that someone with access to their credentials signed the document.

This extra verification is particularly valuable as AI-powered fraud makes traditional authentication methods easier to compromise. For businesses handling high-value contracts or operating in regulated industries, Verified Digital Digning offers enhanced fraud protection and legal defensibility beyond what standard digital signatures provide.