InformationWeek

For a document to be found legally binding in court, lawyers and analysts say, someone must be able to authenticate that it was electronically signed by the person who claims to have signed it, and the signed document can't be altered. Digital certificates, a digital ID card used with any public key encryption system, play a valuable role in authenticating the sender.

An automated teller machine transaction might be considered a type of E-signature transaction. A customer puts a bank card in an ATM, enters a PIN, and conducts a transaction, which is electronically "signed" by the use of the card and PIN, then stored and stamped within a program that can't be altered. The bank is confident of the customer's identity, because she has the card (the digital certificate, as it were) and knows the PIN (a type of E-signature).