We often receive questions about electronic signatures and wet signatures.
Is an Electronic Signature the same as a Wet Signature?
The answer is no. An electronic signature is the digital equivalent of a handwritten signature that allows you to sign documents and contracts online.
What is a Wet Signature you ask?
It is the traditional way of signing documents using ink on paper.
Executives prefer signing documents electronically between electronic and wet signatures because it is easier, faster, and more convenient.
Wet or ink signatures have long been the standard for legally binding documents or contracts.
But signing contracts with pen and paper is slowly disappearing with the advent of electronic signatures.
What is a Wet Signature?
A wet signature is a physical signature made with a pen or other writing instrument on a physical document, usually made in ink.
It is called a “wet” signature because the ink or any other material is wet when signed.
A wet signature is drawn by writing the name elegantly or using name stamps, especially for companies and institutions.
Is a Wet Signature Legally Binding?
Yes, wet signatures are legally binding and are used to authenticate documents and indicate approval or approval.
What Documents Require a Wet Signature Only?
Here are examples:
- Last Will and Testament
- Legal force
- Adoption papers
- Prenuptial agreements
- Divorce decrees
- Real estate transaction documents
- Mortgage contracts
- Promissory notes
- Trust agreements
- Some government forms and applications (such as passport applications and immigration forms)
Advantages of Wet Signatures
Wet signatures are still important in the business world. It includes the top 3 advantages:-
- Legality and Authenticity: Wet signatures are widely accepted and legally binding for any transaction. Being unique to each individual, it ensures authenticity and prevents fraud.
- Familiarity and Trust: Wet signatures are easy to understand and do not require any unique technological process.
Many people feel more comfortable and confident signing physical documents with a pen or other writing instrument, especially companies that handle sensitive or confidential documents. - Tangibility: Wet signatures require the signer to be present, usually with co-signers, to sign the document.
This helps to leave a long-lasting impact on the signatories and the event can be used for brand promotion and other social purposes.
Disadvantages of using Wet Signatures
Wet signatures have long been a standard for business and document management.
But today’s consumers expect business processes to be fast, easy, and seamless, making wet signatures irrelevant due to their many drawbacks.
Disadvantages include:
- Time consumption: Obtaining wet ink signatures is much slower than obtaining electronic signatures.
This involves printing a document, signing it, mailing it to the recipient, and waiting for other parties to do the same. It may take days or weeks to complete. - Disadvantage: The manual signing process requires two interested parties to sign their contracts in the same location, sometimes with witnesses.
Adding more signatories can hinder progress. - Cost: Signing large documents produces high paper, ink, and shipping or travel costs.
You may also need to consider the cost of delay, potential business losses, and lack of agreement between the parties.
What is an Electronic Signature?
Electronic signatures act as a fingerprint or unique identifier that allows a person to sign documents and contracts digitally.
They provide a fast and efficient way to sign documents, making them ideal for urgent transactions.
Electronic signatures can be created using several methods, including writing your name, drawing your signature on a touch screen with a stylus, or even clicking the “I agree” button.
The basic form of an electronic signature is simply a duplication of wet signatures.
This involves scanning the physically signed signature and uploading it to a PDF or MS Word document.
No matter which method you use, it is legally binding and provides a safe and convenient way to sign documents electronically.
Advantages of Electronic Signature
Fast-paced companies seek to accelerate overall efficiency and productivity.
Switching to electronic signatures offers these advantages over and above any advantages of collecting wet ink signatures.
For example, Cleartrip used electronic signatures to improve operational efficiency in its partner onboarding process.
Some Advantages of Electronic Signatures include:
- Convenience: Documents such as agreements, contracts, etc. It can be signed at any time and from anywhere, eliminating the need for in-person meetings or sending physical documents by mail.
It also enables better record-keeping and a better customer experience by reducing friction and errors in business transactions. - Speed: Organizations can automate and digitize critical aspects of business workflow, providing a faster, simpler, more digital experience.
When signed electronically, contract execution time can be reduced from weeks to days or even minutes. - Cost-effective: Electronic signatures eliminate paper, printing inks, shipping supplies, and delivery service fees that can add up quickly, especially for businesses managing large volumes of documents.
Disadvantages of Electronic Signature
Introducing new technology into an organization’s existing workflows and processes is likely to create many challenges, and e-signature adoption is no exception.
Before diving into using e-signatures, it’s important to be aware of the challenges and understand how to overcome them.
- Security Concerns: With any digital document, there is always the risk of cyber threats, such as hacking, data breaches, or identity theft.
- Companies must take appropriate measures, such as encryption and multi-factor authentication, to protect sensitive data.
- Technical Requirements: To use electronic signatures, businesses must have the appropriate software and hardware, such as a reliable Internet connection, compatible hardware, and electronic signature software.
In addition, there is a need to provide exclusive training to employees, which increases the organization’s expenses. - Legal Considerations: Companies must understand the legal requirements and guidelines of their jurisdictions and ensure they comply with them.
Sometimes an electronic signature may be ruled inadmissible in court due to deficiencies in security, audit trails, and authentication.
To address these challenges, companies can consult with legal experts to ensure that their documents and processes meet legal standards and partner with reputable e-signature providers who adhere to relevant laws and regulations.
E-signature and Wet Signature: what’s the difference?
Electronic signature speeds up the flow of commerce and wet signatures slow it down.
According to Prescient & Strategic Intelligence, the global e-signature market is expected to exhibit a CAGR of 26.6% between 2021 and 2030.
In addition, electronic signatures have become legal in all US states and territories to which federal law applies.
Although electronic signatures are growing in popularity, some circumstances still require wet-ink signatures.
On the one hand, people are afraid to abandon familiar practices because of new and unknown technology.
Second, new tools and software require additional rounds of training, which leads to downtime.
Below we list 5 differences between electronic signatures and wet signatures.
1. Legitimacy
Both electronic signatures and wet signatures are legally binding.
However, electronic signatures are subject to specific laws and regulations, such as the Electronic Signatures in National and Global Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA).
Electronic signatures may not be accepted for some legal documents for a variety of reasons, such as specific legal requirements, physical presence, or concerns about the integrity and security of documents.
2. Comfort
Electronic signatures provide greater convenience as they can be signed from anywhere, using various devices, including smartphones, tablets, and laptops.
Wet signatures, on the other hand, require the signer to be physically present to sign the document.
3. Security
Electronic signatures provide greater security because they can be encrypted and include multiple layers of authentication, such as passwords, PINs, and biometric identification.
On the other hand, wet signatures are more vulnerable to fraud and forgery.
4. Record keeping
Wet signatures are subject to loss or damage.
Electronic signatures provide a more reliable record-keeping system because they create an electronic trail that can be easily traced and stored in the cloud.
5. Profitability
Electronic signatures are cost-effective because they eliminate the need to print, mail, and store physical documents.
Wet signatures cost nothing to sign a document, but they do involve additional expenses such as printing, mailing, and storage of physical documents, which can be expensive.
Can Electronic Signatures Replace Wet Signatures in 2024?
While wet signatures still have a place in certain situations, electronic signatures are rapidly gaining ground as a faster, more convenient, and more cost-effective alternative.
With the continued advancement in technology and increasing demand for online document management solutions, electronic signatures will continue to gain popularity and eventually replace wet signatures in many situations.
However, the ultimate adoption of electronic signatures will depend on individual industries and their respective legal requirements.
For example, electronic signatures remain invalid in many circumstances, such as wills, adoption forms, passports, and citizenship and immigration cases in Australia under the Electronic Transactions Act 1999.
Choosing between Electronic and Wet Signatures in 2024
When choosing between electronic signatures and wet signatures, it is important to consider several factors, such as the type of document, the purpose of the signature, and the signer’s preferences.
Electronic signatures provide a convenient and effective option for routine or low-risk documents.
Wet signatures are preferred in complex or high-risk transactions due to their legal recognition and validity.
Businesses should also evaluate the regulatory landscape and ensure they are using a secure, compliant e-signature solution that meets industry standards and legal requirements.
Ultimately, the choice between electronic signatures and wet signatures will depend on the specific needs and circumstances of each case.
Businesses and individuals must carefully weigh the advantages and disadvantages of each option before making a decision.
To break the routine cycle of printing, signing, and mailing, WeSignature highlights its e-signature platform that will help in managing business contract workflow.
The modern approach to transitioning to electronic signatures begins with a comprehensive view of the contract management process.
With advanced tracking features, WeSignature provides better document visibility and ensures high security.
ALSO READ
How E-Signatures Are Reducing Paper Waste in 2024
Choosing the Right Electronic Signature Platform for Your Construction Business
3 Types of Electronic Signatures (Plus Examples of When to Use Each in Education)
