How Do Digital Signatures Secure eCommerce Transactions

A digital signature is exactly what you think it is — a modern alternative to signing documents with a pen on paper.

Suppose you’re wondering how digital signatures are different from simply putting a photo of a signature on a document. In that case, digital signatures use cutting-edge technology to keep the authenticity and accuracy of digital messages and official documents. 

One significant benefit to using verifiable digital signatures is that it assures you and all parties that the contents of a message are not changed while helping you mitigate fraud in digital communications. 

Digital signatures likewise provide added information. For example, you might get the source of the message, position, and agreement from the signer — information you wouldn’t have had access to if you were putting pen to paper. 

And while it has several use cases for contracts and agreements, it also has its place in ecommerce.

How Do Digital Signatures Work in the eCommerce space?

Wondering how these work when you use them for ecommerce? 

Here is how working with digital signatures works in general:

  • First, the source picks the file to be digitally signed in any application.
  • Next, the source’s computer computes the exclusive hash value of the file content.
  • This hash value is encoded with the source’s secretive key to making the digital signature.
  • Finally, the individual file accompanying its digital signature is directed to the receiver.
  • The receiver utilises the related document application, recognising that the file has been digitally signed.
  • At that time, the receiver’s computer decrypts the digital signature using the sender’s public key.
  • The receiver’s computer then computes the hash of the unique file and associates the hash it has calculated with the here-and-now decrypted hash of the sender’s file.

In the ecommerce space, you can track all the data you need from ecommerce shoppers, vendors, and stakeholders. It serves as a permanent trail to track the status of documents while keeping them handy in the case of any disputes.

For an industry like ecommerce, where fraud, chargebacks, and disputes are widespread, digital signatures make it simpler and easier to keep a paper trail of agreements, terms and conditions, and official documents that require signing.

How common is using digital signatures in ecommerce?

In several countries, including some areas of North America, the European Union, and APAC, digital signatures in ecommerce are known to be legitimate and hold the same weight as customary document signatures.

Along with digital document authorisation, they are likewise used to verify and keep agreements for monetary transactions, email service suppliers, and software dissemination, areas where the genuineness and integrity of digital communications are critical. 

Furthermore, using a public key infrastructure guarantees digital signatures in e-commerce data validity and reliability. Given all of these, digital signatures are an essential tool that can help secure ecommerce transactions and take your business to the next level.

Standard uses & examples of digital signatures in ecommerce

Wondering how digital signatures secure ecommerce transactions? These days, digital signatures are typically used for a diversity of dissimilar online documents to develop the efficacy and safety of vital business dealings that are in this day and age paperless, counting:

  • Contracts and legitimate documents. Digital signatures in ecommerce are authenticated. Therefore, they are perfect for any legal document that requires a genuine signature by one or other parties while guaranteeing that the record has not been changed or tampered with.
  • Sales contracts. Digitally signing agreements and sales contracts, both the seller and the buyer personalities are made legitimate. And both mutually have the assertion that the signs are legal and that the agreement’s regulations have not been changed.
  • Financial papers. Financial subdivisions digitally sign the proof of purchases so that customers have faith that the payment request is approaching from the appropriate seller. This mitigates the risk of swindlers who may try to scam ecommerce buyers by taking payments from fraudulent accounts. 
  • Healthcare information. Data privacy is vital for patient records and study material in the healthcare industry. Digital signatures in ecommerce certify that this confidential information has not been changed when communicated between agreeable parties.
  • Government procedures. Government interventions at the state, national, and native levels have stringent guidelines and principles for numerous private sector industries. From consenting permits to agreements, the signatures can restructure efficiency by guaranteeing that the correct employee is concerned for the appropriate approvals.
  • Shipping papers. When you use digital signatures, you no longer have to waste time or risk losses when you have to send physical documents for signing. You can send documents for signing and collecting signatures without leaving your office or home. With digital signatures, you can also keep them on the cloud, so you never have to worry about physical storage in the long run.

How do digital signatures secure ecommerce transactions

Now that we’ve seen some examples and use cases of digital signatures in action in the ecommerce space, here’s precisely how they secure your ecommerce transactions and make online selling safer for everyone.

1. Hashing process and cryptographic encryption

Hashing is one of the fundamental elements of a digital signature organisation. The hashing procedure includes converting data of any magnitude into a fixed-size output, and this is completed by a particular kind of algorithm called hash functions. 

The work produced by a hash function is called a hash value or a message digest. When joined with cryptography, the supposed cryptographic hash functions can be utilised to make a hash value (digest) that functions as a distinctive digital fingerprint. 

This means that any input data (message) alteration would result in a changed output (hash value). And that’s the explanation why cryptographic hash functions are extensively utilised for confirming the genuineness of digital signatures in ecommerce. 

2. Public key infrastructure

Public-key cryptography, or PKC, denotes a cryptographic system that exploits a pair of keys: one public key and a private key. The two keys are statistically related and can be utilised for data encryption and digital signatures.

As an encryption tool, PKC is more protected than the more elementary approaches of digital signatures in ecommerce. For example, dated systems depend on the same key to encrypt and decrypt data. But PKC permits data encryption with the public key and data decryption with its matching private key. 

Similarly, the PKC scheme might also be functional in producing digital signatures. The procedure entails hashing a message (or digital data) accompanied by the signer’s private key. Subsequently, the message recipient can assess if the signature is lawful by utilising the public key delivered by the signer.

In some circumstances, digital signatures in ecommerce can involve encryption, but that isn’t permanently the case. 

For example, the Bitcoin blockchain utilises PKC and digital signatures, but dissimilar to numerous tend to believe, there is no encryption in the procedure. Instead, theoretically, Bitcoin organises the so-called Elliptic Curve Digital Signature Algorithm (ECDSA) to validate connections. 

Advantages of using digital signatures for secure eCommerce transactions

Secured data sharing

You can be assured of the safety of digital signing in eCommerce because of the abovementioned features and security measures like public key infrastructure, hash functions, cryptography, and encryption.

All these approaches make a robust security system for digital signatures in ecommerce. For instance, a seller can communicate confidential information about the product or an agreement with the purchaser by safeguarding it with a digital signature.

Reduced fraud activities

It’s no secret that any partially accomplished impostor can copy and forge a physical signature. 

Digital signatures in ecommerce help you avoid the risk of forgery since they are supported by a unique digital identity centred on internationally acknowledged public essential infrastructure standards. There is no greater level of safety than this when signing a document.

Secure online transactions

A digital signature presents more safety than an electronic signature. The exceptional detecting “fingerprint” data in a digital signature remains everlastingly fixed within a document. 

Therefore, signs that somebody has interfered with or changed a document after signing it can easily be seen and caught. Using encryption verification technology such as critical public infrastructure, a digital signature becomes the best and most certifiable standard for detecting an individual by an e-signature. 

The encrypted message in digital signatures in ecommerce exclusively classifies the signer and relates them with a specific chronicled document. Because of this, digital signatures only help secure ecommerce transactions better than even physical signatures on paper.

Share data more securely.

The parties to a digital signature file do not need to depend on a seller’s constant presence in the market to continue to confirm its authenticity. 

You’re making it easier to share when you send a file for signing to any intended recipient through digital signature technology. Because digital signatures require things like a third party’s email, you know that you’ll be reaching the right people, and only these people will have access to your files and documents.

Increased efficiency and transparency

There’s often very little room for error when it comes to contracts. 

Unfortunately, paper-based systems are frequently predisposed to having things like typographical errors or signatures in the incorrect fields, making contract organisation a bother. 

Nevertheless, automating your contract signing with digital signature technology, especially in ecommerce, can radically reduce the incidence of these mistakes. This is made possible by how digital signatures require an assessment at each step of the authentication process, so you can be sure things are perfect before anyone signs. 

Key Takeaways/Conclusion

Several ways are adopting digital signatures in your ecommerce business helps secure transactions. Revisit this post to see just how digital signatures can take the weight off agreements, contracts, and even orders. 

And if you’re ready to start benefiting from digital signatures in your ecommerce business, sign up today with SigningCloud and see just how lightning-fast you can create your first document and start collecting those signatures.

SC (CTA) How Digital Technology Can Future-Proof Your Business - March 2022 (2)
Table of Contents
Share this article