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Electronic Signatures: the Wave of the Future

Linda Cashdan, Voice of America
February 23, 2001

The Electronic Signature Law, passed by the U.S. Congress last year, gives electronic and digital signatures the legal enforceability of handwritten signatures.

Digital signatures are numerical codes provided by computer hardware and software programs that verify the sender and receiver of messages sent over the Internet. Obviously, the companies that produce those digital signature computer programs are the first to be affected by the new law.

Take ACI International, for example. The firm has been providing payment processing systems to banks and businesses for 25 years. Today, says marketing director Dan Heiman, ACI is offering clients the chance to bill customers over the internet. "What these digital signature laws have done is allow systems like ours to authenticate these signatures as they come from consumers to businesses or businesses to consumers to know that the source is valid," he says.

In addition to offering new opportunities to old companies, the law is spawning new ones, like ClosingGuard, an online real estate service that enables clients to buy houses online. ClosingGuard's spokesperson, Richard Lewis, says location will soon become irrelevant in real estate transactions. "There's really no good reason why someone can't sell their property and complete the transaction on vacation in Hawaii as opposed to being tied to a very arcane system that is paper dependent," says Mr. Lewis.

Indeed, Dan Heiman predicts, we are on the verge of becoming a paperless society. "In the past, you had to deliver a physical document, record it, and be able to reproduce the exact image of that document if someone disputed things," he says. "The digital signature opens up a whole new arena as to what can be done to replace paper and all the costs associated with that."

But change is an evolving process, and a society that relies totally on paperless billing is, Dan Heiman admits, a while away.

It will also take a while for paperless real estate transactions to become commonplace -- but, Richard Lewis, predicts just a short while. "It's going to take a good five years for it actually to become commonplace," he says. "The idea of this paperless closing or paperless mortgage is still years away. You will see a smattering taking place today, but they will be special cases."

A few other countries have passed electronic signature laws, he says, and many are now considering them. As digital signature use increases, Mr. Lewis says, Internet business will multiply both nationally and internationally.

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