Wet signatures vs eSignatures: which is right for your business?

For most of us, a signature is a signature. It’s what happens when you physically sign your name on a piece of paper.

But thinking of a signature as putting pen to paper is a lot like thinking of transportation as riding in a horse carriage. It’s a little outdated, particularly when digital documents and electronic signature software have become so accessible and prominent.

Today, you don’t necessarily need to bust out your quill and inkwell to validate a document. You have the choice between two different signing methods: wet signatures and electronic signatures.

What exactly is a wet signature?

A wet signature might sound like what happens when you accidentally spill your mug of coffee all over an important document (oops). But the true definition is a little less soggy.

A wet signature is another word for the traditional, handwritten signature on a physical document. Put simply, it’s the standard type of signature you typically think of.

It’s called a wet signature as a reference to the ink that’s used to mark your name on the document (hopefully that little nugget of history is helpful during your next trivia night). But you might also hear wet signatures referred to by many other names, including:

• Handwritten signatures
• Manual signatures
• Paper signatures
• Physical signatures
• Wet ink signatures

Regardless of the label you choose to use, this part holds true: You use a wet signature when you use a pen (okay, any writing utensil) to mark up and scrawl your name on a tangible, physical document.

So what is a digital signature?

A wet signature is a classic. A throwback, if you will. But there’s another type of signature that’s gained a lot of prominence in today’s digital world: a digital signature.

As the name implies, this is the digital version of your traditional signature. And much like it’s older counterpart, it goes by many other names including:

• Dry signature
• Electronic signature
• E-signature

With a digital signature, there’s no need to have a real piece of paper or someone physically present in order to sign the document. Rather, with this method of signing, people use digital signature software to sign their name on a digital document. The general process looks like this:

1. The sender prepares a document to be signed and places the necessary fields using their chosen e-signature software
2. The sender enters the signer’s information (usually name and email address) and sends the document to them
3. The signer receives a notification that a document is ready for them to review and sign
4. The signer verifies their identity, fills in the relevant fields, adds their signature, and submits the document back to the sender

In terms of how the signer actually gets their name onto the online document, digital signatures allow for a bit of flexibility in the signing method. With most e-signature tools, the signer could choose to:

• Type their name, which the software converts to a cursive signature
• Use their mouse, finger, or a stylus to “draw” their signature
• Upload a digital image file of their own handwritten signature
• Use biometrics to verify their identity and automatically add their signature

Each of those routes leads to the same end: a valid, legally-binding signature.

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Are both types of signatures legally-binding?

This is a big (and completely legitimate) question people have when thinking about using e-signatures—whether for personal or professional use. Do e-signatures count as legally-binding signatures?

The short answer is yes. Various countries have passed legislation that establishes and reinforces the legal standing of digital signatures. Here are a few examples:  \

• ESIGN Act in the United States
• E-signature Directive in the European Union
• Electronic Transactions Act in Australia

Digital signatures are accepted and legally-binding for the vast majority of documents. However, there are some circumstances where wet signatures are recommended—or even required.

For example, the American Bar Association advises that wet signatures should be used for:

• Promissory notes
• Notarized documents
• Collateral documents, such as mortgages and deeds of trust

In short, some very specific or critical documents, legal documents, or financial documents might warrant a wet signature. But in most cases, a digital signature can take the place of your traditional, scribbled moniker.

Wet signature vs. electronic signature: The good and bad of each signing methods

A wet signature and an e-signature accomplish the same thing: They get your name onto a document to authorize it. But while the end result is the same, each of these methods of signing comes with some distinct advantages and drawbacks.

Wet signature: Pros and cons

Pros:

• Familiarity: Everybody immediately recognizes and understands the signing process and the intention.
• Notarization: While many states allow for remote online notarization (RON), there are still some where it isn’t legal—or it’s only legal temporarily. A wet signature is still the most widely-accepted form of signature by a notary public.
• Validity: Similarly, a wet signature is considered a valid, legal signature on any type of document. As we mentioned above, there are some very limited forms or circumstances where an e-signature won’t suffice the same way.

Cons:

• Inefficiency: Particularly with the rise of remote work and digital connections, wet signatures can be clunky and inefficient. You need to physically get a piece of paper in front of somebody for them to sign—whether that means traveling to them, asking them to come to you, or mailing a document.
• Cost: Traditional signatures can be surprisingly expensive when you add up the costs of resources and materials (paper, ink, envelopes, postage, and more) and the wasted time and effort on archaic, paper-based processes.
• Security: It’s tempting to think of wet signatures as the pinnacle of security, particularly since you don’t need to transmit critical documents through cyberspace. In reality, physical documents are easily intercepted and wet signatures are easily forged or tampered with.
• Human error: Wet signatures often bring along some burdensome and repetitive business processes—think printing stacks of documents, preparing mailings, and scanning in duplicates so you have a digital backup and paper trail. Those processes don’t only eat up valuable time,  but they also open up more opportunities for typos and other mistakes that could invalidate your document.

Electronic signature: Pros and cons

Pros:

• Convenience: E-signature apps make it easy for people to add their signature to a document from any electronic device with a couple of quick clicks. There’s no need for slow mailings or in-person appointments (which is one of the reasons why use of digital signatures skyrocketed during the pandemic).
• Efficiency: Where wet signatures can take days, digital signatures take minutes. They have a much shorter turnaround time than traditional signatures, which is particularly important if you’re facing a tight contract deadline or a pressing due date on other paperwork.
• Security: Many e-signature tools use encryption, various identity verification methods, and detailed digital trails of the document’s history. Many also use a Certificate Authority, a trusted third-party that verifies a signer’s identity. In short, digital signatures are incredibly safe and secure.
• Accuracy: Forget sticky notes and a bunch of overwhelming fine print on a physical document. With digital signatures, you can include helpful prompts, mark certain questions as required, and include formatting directions so that you get the information you need correctly the first time—without any back and forth.
• Cost-effectiveness: While e-signature tools do come with a modest price tag, they quickly pay for themselves in the money and time you save on clunky processes and potential paperwork errors.

Cons:

• Learning curve: Electronic signature apps are intuitive and easy to use. But even so, some people can feel daunted by new technology and needing to use an unfamiliar tool or online signatures in general.
• Security misconceptions: Digital signatures really are more secure than their traditional counterparts. However, they’re still perceived as risky by some people. That can be a tough misconception to overcome.
• Initial price tag: E-signature tools are reasonably priced and worth an investment for the benefits they offer your business, but they do require some money. That initial price tag can turn people off, particularly when they perceive wet signatures as “free” (spoiler: they’re really not).
• Validity: In the vast majority of situations, a digital signature carries just the same weight as ink on paper. But there are a few very limited circumstances when they aren’t the best choice. That can be confusing and inspire people to default to traditional signatures in the interest of playing it safe.

We know that’s a lot to take in. So, if you need some help processing that information and making your best choice, here’s a quick chart to help you.

Wet signatures or electronic signatures: Which one is right for your business?

All of the above should help you determine which method of signing is the best choice for your business. But, if you want us to make it simple for you, here’s our most straightforward answer: Use wet signatures only when you absolutely have to. This might mean when:

• Regulations or circumstances dictate that a wet signature is the most acceptable option
• Signers request a physical document and signature, as they need to consent to use electronic signature technology in order for their signature to be valid

Or, you know, when you run across a celebrity in line for bagels and ask them to sign a napkin. Then you want the “real” thing.

In all other cases? Well, we’re going to give the win to e-signatures. They’re more accurate, convenient, cost-effective, efficient, and secure than the ink signatures of the old days. So go ahead, set the pen (or quill or chisel…) down and step into the modern era.

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