From Estonia to Silicon Valley to your local Home Affairs office, electronic signatures are changing the way we do business. Are you ready to make your mark?


There’s a reason why Estonia starts with the letter E. Last October, parliament in the small Baltic republic voted unanimously to grant e-residency to foreigners. Once you’re verified (€50 and an ID photo later), you’ll receive an ID card, PIN code and electronic signature. This e-signature unlocks the country and allows you to open an Estonian bank account, encrypt your own documents, and run an Estonian-based business – all without ever physically visiting the country.

Estonia hopes to sign up about 10 million digital citizens by 2025, and while it may be the first country to offer this kind of e-citizenship, it’s by no means the only nation to embrace electronic signatures.

In Taiwan, an electronic signature could help you become president. The country’s Central Election Commission now allows signature forms for presidential campaign petition drives to be submitted electronically; and in Hungary, telecoms giant Magyar Telekom enables customers in its shops to make purchases using e-signatures, entered at specially equipped in-store terminals.

You use multiple electronic signatures every day without realising it. ‘Checking out on Amazon and agreeing to terms of services online are technically electronic signatures,’ says Daryl Bernstein, CEO of e-signature company RightSignature. ‘Basically, everybody has done electronic signatures, whether they know it or not.’

So what exactly is an electronic signature? It’s not a scanned image of your signature. That would be like issuing a rubber stamp of your signature. Legally, a legitimate signature must be made by a person to indicate proof of an act of acceptance, and there must also be reasonable evidentiary weight that the signature is original. The signature itself is not what’s important; the meaning behind it is.

In SA, the primary purpose of a signature is the intention to authenticate. Under the Electronic Communications and Transactions Act 25 of 2002 (ECT Act), the country recognised the legality of the electronic signature, defining it as ‘data attached to, incorporated in, or logically associated with other data and which is intended by the user to serve as a signature’. Here, data could mean an electronic sound, symbol or process. As long as it has been executed by a person with the intent to sign the record, it’s a signature much like an X or a thumbprint in the ink-and-paper world.

The key part of the ECT Act, however, is Section 13(2), which states that ‘an electronic signature is not without legal force and effect merely on the grounds that it is in electronic form’. In other words, just because it’s electronic, doesn’t mean it’s not a signature.

Speaking to IT News Africa, David Luyt, associate at specialist law firm Michalsons, said: ‘This may seem overly complicated. However, the important aspects here are the intent and the relationship between the document and the signature. Basically, an electronic signature is a piece of data attached to an electronically transmitted document as verification of the sender’s identity and his or her intent to sign the document.’

Electronic signatures are safe, convenient, legally binding and represent the final frontier in the journey towards the ever-elusive paperless office. So why isn’t their use more widespread in business? Taher Elgamal, an Egyptian cryptographer who helped develop the discrete logarithms behind the technology in the 1980s, believes the reason for the slow progress lies in the confusion around the legal definition of a signature.


‘The global nature of a handwritten signature is quite difficult to achieve, not because of developing the technology but because of how we recognise and use signatures,’ he told digital security company Gemalto in an online interview.

‘For digital signatures to become more prevalent in our business processes, a more global suite of standards is necessary. It is not quite enough for a country to declare a digital signature law [and then expect] all businesses to use them. Physical signatures are instruments that we can verify in any place in the world. It is not efficient that a business would use multiple methods of signing and verifying signatures, depending on the place in the world where the signature may need to be verified.’

Still, there is clearly massive potential in this market – as the excitement around DocuSign’s looming initial public offering (IPO) suggests. DocuSign is a San Francisco- and Seattle-based company that provides electronic signature technology. Although founded in 2003, its business has picked up astronomically in the past couple of years –so much so, that more than 50 million users across 100 000 companies now trust DocuSign with their information. In 2012, it accumulated $47.5 million in a round of fundraising. Last May, it raised another $233 million, bringing its value to about $3 billion – nearly double its valuation of $1.6 billion in 2014.

DocuSign’s name is rapidly making its way towards the everyday dictionary. Today we talk about ‘googling’ when we really mean to say ‘use Google’s online search engine’. Before long, we’ll all be ‘docusigning’ our lives away.

‘The name of the company has become a verb,’ DocuSign CEO Keith Krach told Forbes. ‘But it’s interesting because it’s only ever been about 5% of what we do – it’s a metaphor for our powerful approval engine that manages the whole process.’

In order to offer secure digital transactions across the globe, DocuSign has built its own data centres across Europe, while making large acquisitions in Asia and Brazil. Krach believes that those regions are sensitive about data protection, and feel more secure working with a US-based company when they have a local presence.

‘We can reduce risk in security and compliance,’ he says. ‘Core to our strategy is to be Switzerland to digital management.’

DocuSign’s ambitions are pretty clear: become to digital signatures what Google is to online searching, and what the land of cuckoo clocks is to international banking. In other words, become the world leader.

No surprises then that the company has been expanding its footprint into SA. ‘South Africa is ready to accept digital signature technology, and this is being driven by both the legislative system and the business community,’ DocuSign regional sales manager for Africa Avi Rose said in a recent statement. ‘Companies are adopting digital signature technology, as it is trendy to avoid paperwork and increase efficiency, and they can use their existing infrastructure.

‘Companies are adopting digital signature technology, as it is trendy to avoid paperwork and increase efficiency’


‘Also, companies and government organisations need to justify the technology that they have invested in recently by showing just how much money and time can be saved with something as simple as electronic signature solutions.’

Rose added that DocuSign’s digital signature technology is already being tested by the Department of Justice, with the Gauteng court system now using electronic signature solutions to allow court officials to carry out their work more efficiently while improving security measures and authen-tication. The Department of Home Affairs is also testing the use of electronic signatures – linked to its officials’ profiles – to improve its processes, and is applying the system to the roll-out of SA’s new smart ID cards.

Security is, of course, the biggest issue with any kind of signatory process. Here, electronic signatures hold a massive advantage over ink and paper, due to the layers of IT security and once-off authentication that can be added, and the digital footprint it leaves through an organisation’s workflow.

Now, instead of filing important documents away in boxes (that inevitably succumb to fish moths, damp or fire), those documents can be filed – with multiple layers of security protection – within the organisation’s secure IT infrastructure.

There’s also little to no chance of fraud. As Rose said: ‘A hand-written signature can be forged and, if a dispute arises, a forensic expert must determine whether the signature is authentic. This takes time and money but, with a digital signature system, the [authenticity] of a signature can be confirmed immediately and appropriate corrective action taken.’

The only problem is, while e-signatures clearly have a future, they don’t have much of a present. Market analysts Forrester Research estimate that the electronic signature market is seeing an average annual growth rate of 53%, with transactions estimated to grow from 210 million in 2014 to 700 million in 2017.

That said, Forrester vice-president and principle analyst Craig Le Clair says the market is still worth around only $500 million a year.

‘If you do the math, there’s no way the amount of money put into DocuSign could be justified doing the signature part of the process,’ he said, according to an online GeekWire article.

That would explain why DocuSign is frantically trying to expand their offering into overall document management and why, despite all the hype and investment, the company continues to resist signing off on its IPO.

By Will Sinclair
Image: Gallo/GettyImages