The Electronic Communications and Transactions Act (ECTA) of 2002 allows for electronic signatures in South Africa.
The legislation in South Africa follows the EU Directive on electronic signatures. eSignatures may be used as a signing form by any business operating in the South African market, and they are handled the same as handwritten signatures.
It's a mechanism to guarantee the integrity of an electronic document and to authenticate the author. The electronic signature can't be cancelled or reproduced on another document and is impossible to counterfeit. Since 1 July 2016 – the eIDAS regulation (electronic identification and trust services) became law – its minimum legal value is the same throughout the European Union. This regulation specifies that the qualified electronic signature has the same status and legal effects as its handwritten equivalent.
It's no surprise that digital signatures are becoming increasingly indispensable in the various commercial exchanges within the banking and insurance, retail, human resources and real estate sectors.
From our work with implementing electronic signatures here at CM.com, we've compiled a list of the top 4 problems solved by electronic signatures:
1.More efficient use of time
Compared to traditional signatures, the electronic signature saves much time since it's possible to send a document to be signed by several signees in just a few clicks.
In many sectors, such as banking and insurance, the electronic signature makes it possible to conclude sales outside of business hours or subscribe to online offers 24/7.
An electronic contract will always be ready to be signed in seconds, which also shortens file processing time. A customer or a partner can sign a document via any device (mobile phone, tablet, PC, etc.) without having to go back to the office or pick up a scanner to send it. This approach makes electronic signing vastly superior to traditional signature methods.
In the human resources sector, e-signing makes it possible to sign a work contract quickly, and multiple documents can be signed and returned promptly and efficiently.
According to a study conducted by CM.com, the electronic signature would reduce operating costs by £61,672 (approx. ZAR 1 236 297 ) in a year or so if used via the Web application £67,870 (approx. ZAR 1 360 200) through the integration of the API. This estimation was based on 500 signed documents per month and two signatories per document. Indeed, the paper management of contracts and documents to be signed is more expensive than the e-signature (in terms of travel, shipping costs, use of paper, etc.).
3.Follow the progress of files
The electronic signature makes it possible to follow the progress of files in real-time. Thanks to a digital certificate, it's possible to trace each modification or action performed on the original document.
The tracking tool integrated with most electronic signature solutions can trace the signatures' progress and send an automatic reminder to recipients who haven't signed the document. This tool informs everyone involved where each document is in the signature loop.
4.Secure access and identity of the signatory
It is possible to choose a security level adapted to specific needs and set up one of the three degrees of electronic signature reliability. According to the eIDAS regulation, the use of electronic signature provides three levels of security:
- Standard (a checkbox)
- Advanced (the identity of the signatory is linked to the signature)
- Qualified (each signatory must first identify with a trusted service provider).
Indeed, the mere fact of filling a box, putting your name or "agreement" on a website is considered an electronic signature. The great advantage of the standard signature is that it remains very accessible to the signatory. The issue is that this type of signature is easily counterfeited.
On the other hand, advanced and qualified e-signatures have a higher legal value and can be used for high-value and high-risk agreements such as the transfer of real estate ownership. These categories of signatures make it possible to guarantee the identity of the signatory while conforming to the European regulation on the protection of data (GDPR), which aims at greater transparency and responsibility when it comes to the sharing of personal data.
Keep in mind that each person who wants to sign must undergo face-to-face authentication before receiving a digital certificate associated with their advanced electronic signature. This may add time to the process.
To summarise, the digitalisation of services and processes helps accelerate trade in South Africa in many sectors. Daily, the electronic signature facilitates interactions between companies, individuals and public organisations. Choosing the level of security appropriate to companies' needs also allows us to rethink and modernise the way information and documents are accessed, managed and secured within organisations.