If you’re reading this article, you may be wondering, what’s the difference between digital signatures and electronic signatures, and when to use each?
- Digital signatures are a form of cryptographic technology used to validate the authenticity of a digital document, ensuring it hasn’t been tampered with.
- Electronic signatures are digital representations of a person’s intent to sign a document — essentially the online equivalent of a handwritten signature.
What is the difference between a digital signature and an electronic signature?
What’s the difference between a digital signature and e-signature? In this article, we’ll break down how each works, highlight their differences, and help you understand when to use one over the other.
Think about the last time you started a new job or signed a lease. Chances are, you didn’t physically put pen to paper. Thanks to the rise of remote work and digital tools, electronic documents and signatures are more convenient and widely used than ever. But to protect these digital transactions, digital signatures play an essential role in security and authenticity.
How does an electronic signature work?
Also written as “e-signature,” an electronic signature is a broad term for any electronic process that indicates acceptance of an agreement or record.
Examples include:
- Typing your name
- Checking a box
- Clicking “I agree”
- Signing with a stylus or your finger
- Entering a unique code
Early forms of electronic signing date back to the pantelegraph in the 19th century, but today’s solutions are faster, legally compliant, and easy to integrate into remote workflows. Electronic signatures enable seamless signing for employment agreements, sales contracts, NDAs, and more — making them essential for modern business.
How does a digital signature work?
A digital signature uses cryptographic algorithms to verify that a document is authentic and hasn’t been altered. It works by generating a unique digital certificate or “fingerprint” for each signed document.
This certificate uses asymmetric encryption (a public and private key pair) to:
- Verify the signer’s identity
- Ensure the document has not been modified
- Track the date and time of signing
Digital signatures are vital in high-security contexts like financial transactions, legal documents, and software distribution, where data integrity and non-repudiation are critical.
When to use a digital signature vs an electronic signature
While these technologies can work together, they serve different functions:
- Electronic signatures are used to sign a document, confirming intent and agreement.
- Digital signatures are used to secure a document, validating its authenticity and preventing tampering.
Think of electronic signatures as the “what” (the act of signing) and digital signatures as the “how” (the secure method behind the signing process).
Use electronic signatures for:
- Hiring and onboarding documents
- NDAs and general contracts
- Customer agreements and consent forms
Use digital signatures for:
- Financial transactions
- Government and legal filings
- Documents requiring tamper-evidence and high integrity
Together, they create a seamless and secure signing experience that’s both user-friendly and highly trusted.
Are digital and electronic signatures legally binding?
Yes — both types are legally binding in most parts of the world, including automated signatures.
In the U.S., electronic signatures are governed by the ESIGN Act and UETA, which confirm their enforceability. In the EU, digital signatures (especially qualified electronic signatures) are supported by the eIDAS regulation.
PandaDoc’s solution is compliant with:
- ESIGN Act (U.S.)
- UETA (U.S.)
- eIDAS (EU)
- SOC 2 Type II standards
Note: Some exceptions still exist. For example, U.S. tax forms and voter registrations often require handwritten signatures.
Comparison table: Digital vs. Electronic Signatures
| Feature | Digital Signature | Electronic Signature |
| Purpose | Verifies authenticity and prevents tampering | Shows intent to sign a document |
| Technology | Uses encryption and certificates | Typing, clicking, drawing, or other digital inputs |
| Security level | Very high — cryptographic validation | Moderate — security depends on implementation |
| Common uses | Financial docs, legal filings, code signing | HR forms, sales contracts, consent forms |
| Legally binding? | Yes, under global laws | Yes, under ESIGN, UETA, eIDAS, etc. |
Final thoughts
Now you know the key difference between digital vs electronic signature types, what can you do with this information?
You can use the best electronic signature software to create meaningful, legally binding digital documents that are quicker and easier for you and your customers to sign!
PandaDoc’s contract management software makes the entire process easier and streamlines it for your business.
Our built-in, legally compliant eSignatures guarantee security and trust.
Interested in learning more? Book your free demo with PandaDoc and get started today.
Disclaimer
PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.
Originally published August 30, 2016, updated June 12, 2025
Frequently Asked Questions
What is the difference between a digital signature and an electronic signature?
A digital signature uses encryption to ensure a document is authentic and secure. An electronic signature is a general method of indicating agreement or approval electronically.
Is a digital signature more secure than an electronic signature?
Yes. A digital signature offers higher security due to cryptographic encryption that prevents tampering and verifies identity.
When should I use a digital signature instead of an electronic one?
Use digital signatures when security, document integrity, and traceability are paramount — such as in financial or legal documents.
What is the difference between an digital signature and a qualified electronic signature?
A qualified electronic signature (QES) is a specific type of digital signature under eIDAS that requires a verified certificate from an accredited provider and offers the highest level of legal assurance.
