Do you need to save costs and optimize document signature processes? Electronic signatures are the definite solution, but you need to be familiar with the different types  of esignatures. In this post we are going to focus on the OTP signature; what is it, when to use it, how it is different  from other signatures and what benefits bring to use it.

What is an OTP signature?

An OTP (One Time Password) signature involves the use of a single use code to sign documents. The code can only be used once. Once an OTP is sent, it automatically expires after a few seconds, and you will have to request a new one

The signature process with an OTP is as follows:

  • The signatory reads the document to be signed.
  • The signatory requests the OTP by email.
  • The system calculates a semi-random code that is sent to the signatory’s mobile.
  • The signatory enters the code, and the system issues an  electronic evidence proving the document has been digitally signed.

What advantages does the OTP signature provide?

Signing documents with an OTP signature  provides the following benefits:

  • Added security. The security of the signature process is provided by two elements, namely the  email and the single-use code. As the code is sent by SMS text message to mobile, identity theft is less likely to happen. In addition, the code is for a single use and for a limited time, providing additional  security.
  • Legality. As a result of what we have explained in the previous section, the OTP signature links the signature with the signatory’s mobile and the signature is linked to the content of the document to be signed through the calculation of the single-use code. Therefore, the OTP signature is entirely legal and can be considered an advanced electronic signature based on Regulation 910/2014 of the European Parliament (eIDAS Regulation). This regulation outlines that an advanced electronic signature must meet the following requirements:
    • It must be linked to the signatory’s ID in a unique manner. Regarding the OTP signature, the signatory is the owner of a mobile phone number
    • It must allow its identification. The mobile number is personal, and it belongs to the signatory .It is worth mention that in Spain to issue a SIM card, the user’s identity must be verified by the telecom operator and a contract is signed.
    • It must be created using data that the signatory can use with trust and has exclusive control.  Regarding an OTP signature, access to the signature request that is sent to the signatory’s email and the numerical code, which is sent to the signatory’s mobile, are under the control of the person who signs.
    • It must be linked to the data in the signed document preventing any subsequent modification thereof. The evidence generated during the signature process ensures that there is no post-signature modification.
  • Simplicity. The signatory does not need any special knowledge or install any application on his mobile phone, so it is a very simple signature system.
  • Saving time and expenses. The OTP signature process is fast, since it is signed within seconds from anywhere and at any time, moreover, this type of signature has not cost for the signatory resulting in resource savings given that there is no need to travel or to print signature pages.
  • Inalterability. The time stamp on the signed document guarantees that the signature was made at a certain time, the code was sent at a specific time and to a specific mobile. All these data, once they are generated, cannot be tampered, or deleted.

When can I use an OTP signature?

The OTP signature can be used for documents requiring additional security and speed in the signature process, eg:

  • Signature of motor, home, or liability insurance policy
  • Signature of a contract with a telecommunications company, to connecting a fixed line phone, internet, or mobile line.
  • Signature of banking transactions, transfers.
  • Online shopping signature.
  • Contract signature with providers.
  • Signature of work contracts

Therefore, the OTP signature can be used in many sectors to benefit from the advantages that we have been discussed and thus, electronic sign OTP speed up all processes.