They are in fact two very different things. Nevertheless, many people use these terms interchangeably. But both are related to signing documents online.
Let’s start with the easy one: electronic signature
This is the kind of signature we’re all familiar with from living in the non-digital world (remember that place?). A typical example: you sign your name on a sales contract. You’re saying: “I, (my name), am agreeing to the terms on this piece of paper.” You make your personal mark, which may or may not be legible, and the deal is done.
When you do the same thing in an online environment, agreeing to the terms on an electronic document using an e-sign service, it’s called an “electronic signature”.
Interesting sidenote: to sign an electronic document, it’s not necessary, legally speaking, to draw your personal mark on the document as you would with pen and paper. Many e-sign services let you do this, using your mouse or touch screen, but your signature is only registered when you click a button that is clearly marked to indicate: “I am signing this document”.
While drawing your personal signature by hand is optional, many prefer to do it, in addition to the legally-binding “click sign” step, simply because it’s familiar, thus giving more confidence in the process.
What about a digital signature?
Think of it this way: an electronic signature is something a person does, and a digital signature is something a machine does.
And what is it the machine does, exactly? In short, it applies a security seal to a document. That’s why a digital signature is also known as a “digital seal”. To take a very old-fashioned example, which you may have seen in movies: a wax seal on a paper envelope, as long as it’s intact, is how you know that the document inside the envelope has not been tampered with or altered in any way.
In the context of signing documents, a digital signature is applied as soon as the signing parties (people) have electronically signed the document.
In the case of electronic documents, unlike a paper envelope sealed with wax, you can in fact read the contents without breaking the seal because a digital signature is like a unique fingerprint applied to the document. No matter how many copies you make of the sealed document, every copy will bear this unique fingerprint.
However, if someone alters the document in any way, even just one bit of digital information, the seal will be broken. This can be demonstrated through a mathematical analysis of the fingerprint, which is very useful in a dispute over a document’s authenticity.
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