E-Signed, Sealed, Delivered?

By SmallBusinessComputing Staff | Posted April 01, 2001
by Tom DiNome

The electronic signatures law, which gives digitally signed documents the same legal weight as those with physical signatures, went into effect in June 2000. But since then, companies have been slow to stamp their electronic John Hancocks on business transactions. Digital signatures can have applications in any industry, but folks in the financial services and legal professions, where obtaining necessary approvals on confidential and financially sensitive documents is a way of life, are paying close attention to their acceptance.

"I don't think there's anybody that wants to be the first to put their feet in the middle of it," says Chris Dederer, customer support manager at DocuTouch, which provides a digital signature application. "Everybody seems to be excited about the process. It's just a 'how can I be sure' type of thing."

According to John Crouch, an attorney with Kilgore & Kilgore, a small law firm in Dallas, Tex., one issue preventing the acceptance of digital signatures is the ability to verify the signer's identity in court. "It could be that, because of the new federal law, courts will be required to accept electronic signatures on affidavits," he says. "My feeling is that will not be a good idea. It is much easier for a witness to deny an electronic signature because their ink signature is not there. There will have to be technology in place or some sort of corroborating evidence to get past that hurdle of showing that the person who clicked that box really is the person you're asserting signed that document."

There's also the cost issue. DocuTouch offers per-transaction costs (up to $1 per transaction) or subscription-based costs of around $25 a month, and then $40 a year for the certificate. But there could be more. "You might be talking somewhere less than $10 for each certificate," says James Van Dyke, senior analyst at Jupiter Research. "But the implementation costs can be significant. You need to attach these to the transaction processing and management systems, and that can easily run more than $100,000 and into the millions."

Van Dyke lays out one ideal scenario for digital signatures: "If there are repetitive transactions going on between two organizations or within a small trading community, then it might be worthwhile," he says. "As opposed to having somebody who comes in, does two transactions and you never hear from them again. Meanwhile, you spend all this effort and you haven't even recouped the cost of that effort in the transaction."

For now, companies, are taking a "wait-and-see" attitude on digital signatures. But then five years ago, who thought we'd be buying products regularly over the Web?

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