Wet Signature vs. Electronic Signature 

by Adarsh Raj Bhatt in

Photo credit: Pexels

Key Takeaways

  • These days, electronic signatures are preferred over wet signatures. 
  • Wet signatures may be a thing of the past, but certain proceedings require them.
  • Digital signatures are not synonymous with electronic signatures.
  • Digital signatures are characterized by added advanced security measures such as encryption.
  • Both electronic signatures and digital signatures have been gaining ground with the increase in remote work.

What is a wet signature?

"Wet signature" simply refers to the act of physically signing a piece of paper with a pen or a seal. Traditionally, signing in this manner was seen as a step towards combating fraud. Also known as "handwritten signatures," wet signatures are used in situations when electronic signatures will not suffice. The term “wet signature” was probably derived from the liquid ink in a pen. 

Here are a few instances where wet signatures are mandatory, and cannot be replaced by electronic or digital signatures:

  • When a notary public must verify the identity of document signers
  • On documents dealing with trusts, divorce proceedings, wills, adoptions, court orders, loans, and insurance benefits
  • Instances where the document recipient is persistent (or insistent) for a wet signature as the only way to establish the document formally.

What is an electronic signature?

An electronic signature is the most common type of dry or non-ink signature and refers to a signature that is in electronic form and executes a document the same way as a wet signature does. An electronic signature usually uses a smartphone or computer for authenticating the signers and is portable, time-saving, and legally binding. Electronic signatures have replaced traditional wet signatures, and in doing so, they have emerged as an environmentally friendly alternative.

Benefits of a wet signature

Electronic signatures now carry the same weight as wet signatures. However, there are some advantages to using wet signatures. 

  • Remote signatures can feel more impersonal than wet signatures.
  • Every party must be present to sign a document with wet signatures. This ensures that everyone is on the same page with the terms of the document.
  • There is no scope for ambivalence and doubts can be cleared instantly when using wet signatures. This is mostly because all signatories have to provide an acknowledgment of their understanding on the spot.
  • Wet signatures help cement business relationships by providing a clear understanding of who signs a particular document.
  • Meeting in person to sign documents goes a long way in solidifying relationships between organizations and can be deemed by some as more ethical.
  • Certain laws require wet signatures for making particular documents legally valid. These include documents for loans, adoptions, divorce proceedings, court orders, etc. In such cases, a wet signature is mandatory.
  • Some signatories accept wet signatures as the only way to make a contract legally binding. That's why your startup should be flexible and accept both types of signatures.
  • Wet signatures carry with them time-tested authenticity and acceptance.
  • Wet signatures are the preferred option for people who are used to the traditional mode of executing documents with pen and paper and with all signators physically present.

Limitations of a wet signature

Electronic signatures have made their way into the very core of business operations. In the electronic signature versus wet signature comparison, users frequently give a nod to electronic signatures. 

This is because of the limitations of wet signatures:

  • Wet signatures are implemented on paper. Storing several volumes of paper documents often takes a toll on time, space, and monetary resources.
  • Processing paper documents that are bound by wet signatures takes a lot of time. Subsequently, a lot of time is lost in following up with different people across departments and orgs.
  • Keeping physical track of all the paperwork is very difficult for audits and other purposes. Business orgs can go days on end looking for one important piece of paper bearing a particular wet signature or going through volumes of dust-laden files.
  • Wet signatures are not as portable as electronic signatures.
  • Wet signatures are limiting because they do not allow signatories to sign the document remotely. One has to wait for every signatory to be present at the same time and place, and this may not always be possible.
  • Wet signatures are dependent on mail delivery services, couriers, and working days versus weekends and holidays. This is a major limitation for companies dependent on wet signatures.
  • Apart from the cost of ink, paper, and mail delivery, you might lose out on revenue during the time that a signed paper document is processed.
  • You could risk losing out on a particular contract if your clients start looking for options that complete the process more quickly.
  • Wet signatures are not environmentally friendly. Several volumes of paper have to be stored over time and, subsequently, more resources have to be deployed to manage them.

Benefits of electronic signature

Electronic signatures fill in the gap which wet signatures cannot because of their limitations. 

Benefits of using electronic signatures:

  • Electronic signatures are reliable as most e-signature management solutions provide a complete audit trail. Founders have a clear view of who has accessed the document, who has signed and at what time, and if there has been any attempt to tamper with the document.
  • Electronic signature platforms employ top-notch security measures and are hosted on secure networks. Authentication methods are in place to protect the document(s).
  • There is minimal to no chance of violating an NDA in the case of electronic signatures, as access to the document is role-based.
  • Electronic signatures are not limited by time or location.
  • Being independent of geographical location, electronic signatures do not require all signatories to be present at a stipulated place and time. That in itself is a major boon as it is very difficult to get several people together, especially during a pandemic.
  • Electronic signatures are time-saving. There is no need to scan and print a document for sending it in the mail. All of the administrative hassles of managing paper vanish.
  • You do not lose out on potential clients as documents for electronic signatures can be sent to all recipients instantly.
  • Electronic signatures do not require physical storage facilities, which saves your startup money.
  • Electronic signature solutions provide a centralized account of all data and transactions. You can retrieve any data with a few clicks.
  • Electronic signatures are also the preferred option for contract signing across borders. 
  • Electronic signatures are compatible with all mobile devices. This makes them portable; signatories have the option to sign on the go.
  • It is estimated that 90 percent of the turnaround time for documents is saved with electronic signatures.
  • Electronic signatures are not dependent on mail delivery services and on the structure of workdays versus weekends and holidays.
  • Electronic signatures are environmentally friendly.

Limitations of electronic signature

The limitations of electronic signatures are as follows:

  • While electronic signatures have legal recognition, there is no clarity on the legal terms defining the verification process of electronic signatures.
  • If the electronic signature tool you choose does not have encryption and authentication measures in place, it is likely that the security of your documents will be compromised.
  • Electronic signatures may not be suitable for those who are used to the traditional pen-and-paper signature.
  • Electronic signatures can be difficult to use for those who are not tech-savvy.
  • There may be some difficulty in determining the legality of a particular signed document in case the concerned e-signature software becomes obsolete.
  • The control over documents may become a cause of concern because certain electronic signature solutions require you to save your data on their servers forever. This may be a problem for startups that are skeptical about the externally managed storage of their data.
  • Most electronic signature solutions do not offer white labeling. This might not work for startups trying to establish their brand identity in the market.
  • Many users may feel a sense of detachment by remotely signing documents.
  • Electronic signatures could occasionally be limited by network issues.

Wet signature versus electronic signature

Wet signatures have been replaced by electronic signatures because of the growing needs of startups and instant gratification expectations. Having said so, it is important to consider and acknowledge that wet signatures have the time-tested stamp of authentication. The time-tested authentication and ease of use for those who are not tech-savvy gives wet signatures an edge over electronic signatures in the wet signature versus electronic signature comparison. Besides, in some cases, wet signatures are mandatory and the only available option. Electronic signatures, on the other hand, provide startups with ease of functioning because these signatures are not limited by time or place. Startups have limited resources as it is and an investment in an electronic signature solution saves them the costs that have to be incurred for storage spaces, rent, and recurring mail delivery services. This cost-saving feature gives e-signatures an added advantage in the e-signature versus wet signature comparison.

Electronic signature versus digital signature

A digital signature differs from an electronic signature because it encrypts the document by way of added security measures. In doing so, digital signatures make the document more secure, so that any attempt to tamper with it is documented. A digital signature becomes invalid if a user tries to make changes to the document beyond their capacity. It can be said that digital signatures take their electronic counterparts a step further. Electronic signatures may embody a digital version of a signature that is handwritten, whereas digital signatures employ cryptographic algorithms to establish the validity of a document. Such advanced security measures ensure that the original content of the document has not been tampered with. Another difference is that an electronic signature is not technically limited to signatures only. All sounds, symbols or processes attached to a contract are qualified to be included within electronic signatures. 

All in all, digital signatures come in handy for startups that deal with sensitive information and need to meet all the legal requirements surrounding confidentiality. In the case of electronic signatures, the signer's identity is verified by their email ID or their phone PIN. On the other hand, to establish the identity of the signers as valid, digital signatures need an official certificate. Companies providing digital signature solutions need to comply with the Public Key Infrastructure (PKI). The PKI lays down rules for the implementation of digital signature technology by businesses. 

Another point of difference is that digital signatures have universal acceptance because of the assurance that the document cannot be tampered with from start to finish. PKI requires digital signature providers to employ a mathematical algorithm to generate two keys - a public key and a private one. 

To conclude, electronic signatures seem to have an edge over wet signatures because of their flexibility and portability, whereas digital signatures have a further edge over electronic signatures because of the additional security measures that they employ.

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