How e-signatures function: A simple breakdown
Electronic signatures are digital versions of your signature that indicate your agreement to the contents of an online contract. They provide a hassle-free way to sign documents remotely, eliminating the need for physical paperwork and enabling faster and more streamlined transactions.
They are legally binding for a variety of purposes and can either be typed, drawn on the screen of an electronic device, or uploaded from your desktop. This modern alternative to wet signatures has been adopted across the world because it empowers individuals and businesses to sign documents online in a legal, secure, and efficient way.
Electronic signatures: Bridging islands, boosting businesses
In a nation comprising more than 17,000 islands, securing a signature in the past often meant traversing seas across the vast Indonesian archipelago. Fast forward to the present day, the tide has turned with the emergence of electronic signatures. E-signatures are now reshaping business operations across Indonesia, offering a faster, more efficient way to handle agreements and transactions. By eliminating the need for physical signatures and in-person meetings, businesses can finalize contracts, approvals, and documents in seconds, no matter where they're located in the country.
Zoho Sign, a digital signature solution, makes this process even easier by offering a fast, secure way to sign documents digitally. It offers a range of benefits, including:
- Faster signing processes
- Enhanced productivity
- Robust signer authentication
- Top-tier security
- Convenient remote access
- Seamless user experience
- Significant cost savings
E-signatures: The key to modernizing industries
In Indonesia, a growing number of industries are embracing e-signatures to boost efficiency, simplify processes, and meet regulatory standards. Here are some key sectors adopting this digital solution:
- Banking and Finance
- Healthcare and life sciences
- Government and public sector
- Legal services
- Retail and ecommerce
- Real Estate
- Logistics and supply chain
- Tourism and Hospitality
Electronic Signatures under the law
In Indonesia, the legal framework for electronic signatures is primarily governed by Law Number 11 of 2008 concerning Electronic Information and Transactions and Government Regulation Number 71 of 2019 concerning the Implementation of Electronic Systems and Transactions.
An electronic signature is a digital representation of a signature that links or attaches electronic information to other data to verify and authenticate a transaction or agreement.
There are two types of electronic signatures:
1. Certified Electronic Signature
- This signature meets specific legal requirements and holds full legal force.
- It must be supported by an electronic certificate issued by a recognized Indonesian Electronic Certification Provider.
- It must be generated using a certified Electronic Signature Creation Device.
2. Uncertified Electronic Signature
- This signature meets specific legal requirements and holds full legal force.
- This signature is created without the involvement of a licensed Indonesian Electronic Certification Provider.
- While still valid for many purposes, its evidentiary value may be weaker in legal disputes.
The legal standing of Electronic Signatures
An Electronic Signature is legally valid if it meets the following conditions:
- The signature must be uniquely associated with the signer.
- The signer should have full control over the signature data throughout the signing process.
- Any changes made to the signature after it has been applied must be detectable.
- Any changes made to the document or electronic information after signing also must be identifiable.
- There must be clear methods in place to verify the identity of the signer.
- There must be clear methods to show that the signer has consented to the document or information they are signing.
Additionally, Government Regulation 71 of 2019 outlines further requirements for a valid Electronic Signature:
- The signing system must confirm that the verification data is valid and has not been revoked.
- The signer must retain complete control over their signature data. The signature data should not be lost, misused, or transferred to unauthorized persons.
- The signer must carefully review and understand the information they are signing before applying their signature.
- There must be a mechanism that demonstrates the signer's intent and agreement to be bound by the electronic transaction.
- The signature must be generated using the appropriate electronic signature creation data and should include the timestamp of the signing.
- Any alterations to the signature or document after signing must be traceable.
Where Electronic Signatures can be used
In Indonesia, Electronic Signatures are recognized as valid for most legal and commercial transactions, unless specifically prohibited by law.
When Electronic Signatures cannot be used
There are certain cases where Electronic Signatures cannot be used:
- Documents that are required by law to be in written form cannot use electronic signatures.
- Documents that must be made in the form of a notarial deed or deeds made by land conveyances cannot use electronic signatures.
Electronic Certificate
An electronic certificate is a digital document that contains an Electronic Signature and identifies the parties involved in an electronic transaction. It is issued by a Certification Service Provider and serves as proof of the signers' legal identity in an electronic transaction.
Electronic Certification Service Provider
An Electronic Certification Service Provider is a legal entity responsible for issuing and validating electronic certificates. These providers act as trusted third parties to ensure the authenticity of electronic signatures.
An individual has the right to use Electronic Certification Service Providers to create Electronic Signatures. These providers are responsible for verifying the authenticity of the Electronic Signature and ensuring it belongs to the rightful signer.
There are two types of certification providers:
- Indonesian Electronic Certification Providers: These must be legally established and based in Indonesia.
- Foreign Electronic Certification Service Providers: These must be officially registered in Indonesia in order to operate within the country.
Electronic Seal
An electronic seal is a type of Electronic Signature used by a Business Entity or Agency to confirm the authenticity and integrity of electronic documents or information.
For an Electronic Seal to be legally valid, it must meet these requirements:
- The seal must be uniquely associated with the signer.
- The signer must have full control over the seal throughout the signing process.
- Any changes made to the seal or the document after signing must be detectable.
- Use certain methods to verify the identity of the signer.
- The signer must give clear consent to the document, showing intent to be bound by it.
The provisions governing Electronic Signatures also apply to Electronic Seals, with the necessary changes having been made.
Electronic Time Marker
An electronic time marker is a digital timestamp that binds a specific date and time to electronic documents or information using a secure method.
Certified electronic time markers must meet the following requirements:
- The time and date must be securely linked to the document to prevent any undetected changes.
- The timestamp must be based on Coordinated Universal Time (UTC) to ensure accuracy.
- It must include an electronic certificate provided by an accredited Indonesian Certification Provider.
- The time marker must be signed using an Electronic Signature or Electronic Seal from an Indonesian Certification Provider, or an equivalent method.
Uncertified time markers, on the other hand, do not involve the services of an Indonesian Certification Provider.
Preservation of Electronic Signatures and Electronic Seals
Preservation of Electronic Signatures and/or Electronic Seals is a service that ensures the continued legal validity of Electronic Signatures and Seals on digital documents, even after the electronic certificate has expired. This service allows the Signatures and Seals to remain verifiable over time.
There are two types of preservation services:
1. Preservation of Electronic Signatures and Certified Electronic Seals
- The service must be supported by an electronic certificate issued by an Indonesian Certification Provider.
- The signature or seal must still be valid and verifiable even after the certificate expires.
2. Preservation of Uncertified Electronic Signatures and Electronic Seals
Uncertified signatures and seals are preserved without the involvement of an Indonesian Certification Provider, meaning they lack the formal validation and security that comes with certification.
Zoho Sign: Offering secure e-signatures for a digital-first Indonesia
Identification and reliability:
Zoho Sign employs strong authentication techniques, such as OTP authentication and PKI-based digital signatures using digital certificates, to ensure that the e-signature is uniquely identifiable.
Sole control over the data being signed:
Only the signatory is allowed to review the document before signing and may reject the document if necessary.
Detectable alterations:
Zoho Sign ensures any alterations to the electronic signature or the document to which the signature is affixed are detectable through an elaborate audit trail of all activities during the signing process. This audit trail comprises critical information, such as the identity of the signatory, the timestamp of the signature, and changes made to the document.
Enhanced security:
Zoho Sign employs robust encryption protocols, such as the military grade AES-256 encryption at rest and the TLS/SSL protocol in transit, to ensure that the data transmission between the signing platform and the data being signed is secure. This prevents exposure of documents and data from data breaches.
Audit trails:
Audit trails provide a comprehensive itemized record of every action taken on a document, ensuring full transparency and accountability throughout the signing process. This detailed log enhances security and serves as legal evidence in case of disputes, making it a vital tool for businesses to maintain compliance and trust in their digital transactions.
Document timestamping
A digital timestamp is a digitally signed notation that is appended to the electronic data, digital signature, or certificate that indicates that certain digital data exists at a certain point in time. This process securely binds the date and time to the document, ensuring its authenticity and integrity. Zoho Sign partners with recognized timestamping authorities, GlobalSign and Seiko, to provide trusted digital timestamps for electronic transactions. These timestamps validate the authenticity of e-signatures and verify that the signed document existed in the given form at the time of signing and remains unaltered. This adds a robust layer of security to the signing process. By making signatures tamper-proof, digital timestamps enhance the reliability of signed documents for both legal and commercial purposes.
Zoho Sign partners with recognized timestamping authorities, GlobalSign and Seiko, to provide trusted digital timestamps for electronic transactions. These timestamps validate the authenticity of e-signatures and verify that the signed document existed in the given form at the time of signing and remains unaltered. This adds a robust layer of security to the signing process. By making signatures tamper-proof, digital timestamps enhance the reliability of signed documents for both legal and commercial purposes.
Key takeaway
The adoption of e-signatures in Indonesia is transforming business operations, driving greater efficiency nationwide. Zoho Sign offers an intuitive, reliable platform that streamlines the signing process, enabling businesses to save time and minimize paperwork.
This digital solution fosters seamless collaboration, allowing companies to work across regions and borders with ease, reducing costs, and improving workflow. Start your free trial today and discover a faster, more secure way to manage your agreements.
Resources
- Law Number 11 of 2008 concerning Electronic Information and Transactions
- Law Number 1 of 2024 concerning the Second Amendment to Law Number 11 of 2008 concerning Electronic Information and Transactions
- Government Regulation Number 71 of 2019 Concerning the Implementation of Electronic Systems and Transactions
Disclaimer
The information provided in this document is for general informational purposes only and shall not be construed as legal, regulatory, or any other form of professional advice. Zoho Sign disclaims any liability for any error in the information provided herein. We recommend that you consult your legal counsel for any questions that you may have in this regard.