E-Signatures: Unsigned, Unsealed, Undelivered

It has been almost a year since former President Bill Clinton signed into law the Electronic Signatures in Global and National Commerce (E-SIGN) Act.

That was the legislation that cleared the way for digital signatures, a move many thought would be pivotal in catapulting electronic commerce into this millennium. Suddenly, everything from auto loans to home mortgages could be signed, sealed and delivered without so much as a Bic pen or a sheet of paper.

Clearly, things have become more complicated than that, because we hear very little about digital signatures these days.

Was it an idea that seemed viable in the planning stage, but more complex in execution? Was it simply a Clinton-era stage show designed to show the administration's forward-thinking approach to e-commerce? Is it an idea that might still work if the kinks are ironed out?

If you checked "all of the above," you're looking at the big picture. Kudos to you for that, since legislators evidently had tunnel vision in their approach to e-signatures.

For those who haven't noticed, the public at large has not yet rallied behind the concept of digital signatures. In fact, many people, if asked, probably do not understand how a digital signature works. Perhaps if the process of using digital signatures were easier, the masses might get behind the idea.

Too Many Hurdles?

But consider what has to happen before a company can even use e-signatures. First, the seller or provider of service must inform customers that digital signatures are accepted and convince them to use the technology.

Then, the company has to ensure that the customer has the appropriate software to even use a digital signature. Then, if the customer so demands, the company has to supply a hard copy anyway.

Somewhere in there, the company also has to specify whether the customer's digital signature is for one sale or a series of sales. If it is for one sale, the company has to send the customer verification that the digital signature is being used only once.

Seems like a lot of steps just to use new technology, doesn't it? Until the process can be streamlined, I may just opt for my Bic pen.

Options Unlimited

If there is one stumbling block that could hand e-signatures a fate worse than Betamax videotapes, it is the lack of a common technology to be used for all transactions. Because no standards have been specified, dozens of developers are racing to get their product to the forefront, leaving both sellers and buyers scrambling.

For example, if your bank does not employ the same digital signature technology as your mortgage company, and your online brokerage uses something different than the company that manages your self-guided retirement plan, will you need four different types of software/hardware to use digital signatures for all of your transactions?

If so, how many of us are going to be willing -- or even able -- to support that effort?

A Matter of Trust

Meanwhile, as if all of these issues were not cumbersome enough, concern over the potential for identity theft via digital signatures remains.

Ask most consumers what keeps them from doing more business on the Internet, and you're likely to hear the same fearful, distrustful responses repeatedly.

With a constituency already concerned about revealing credit-card numbers online, the prospect of losing the last bastion of personal security -- the handwritten signature -- is daunting.

It appears digital signatures have miles to go before we willingly and routinely click. For all of the above reasons.

What do you think? Let's talk about it.