Electronic Signatures in Global and National Commerce Act (e-signature bill)

Contributor(s): Roope Aaltonen

The Electronic Signatures in Global and National Commerce Act (often referred to as the e-signature bill) specifies that in the United States, the use of a digital signature is as legally valid as a traditional signature written in ink on paper. In effect since October 1, 2000, the U.S. law is expected to save companies that use e-signatures a significant amount of money by reducing the costs of mailing and handling hard-copy contracts and similar documents.

The Act does not specify a single digital signature technology. Many e-signature advocates expect that the public key infrastructure (PKI), used for authenticating credit card transactions over the Web, will play an important role in the development of secure e-signatures. Several third-party companies are now exploring other methods to verify a person's legal identity, including the use of personal smart cards, PDA encryption devices, and biometric verifications (fingerprint, voice, or iris scans). Experts agree that until the legality of e-signatures has been tested in the courts, the routine use of e-signatures is likely to be several years away, primarily because businesses lack confidence in present security and verification procedures.

This was last updated in September 2005

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