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To: Mannie who wrote (24643)	7/7/2000 11:58:17 AM
From: Mannie	Respond to of 35685

another interesting article.. E-signatures spark online race Friday, July 7, 2000 By MICHAEL WHITE THE ASSOCIATED PRESS LOS ANGELES -- At tiny sign-Online Inc., executives are working overtime to stake their claim in what could become the Internet's next gold rush: digital signatures, the technology that allows consumers to buy a home or auto without ever signing a piece of paper. The fever of activity is the result of new federal legislation giving electronically signed documents the same legal validity as paper documents. The law, signed by President Clinton last Friday, opened the door to a market potentially worth billions of dollars to the companies that provide the digital signature technology and services. "Eventually, we're all going to have digital signatures," signOnline's co-founder Brad Harvey said. "You're going to see the whole world transformed. This really does change the world." The new law certainly promises to change online commerce. Electronic signatures can be used for online transactions as simple as routine credit card purchases. The real lure for companies that provide the technology are high-value transactions such as home purchases, online stock trading, government procurement and big corporate contracts. The law also poses a challenge for Federal Express and United Parcel Service. As the use of digital signatures catches on, the demand for their overnight document delivery service is likely to drop. "Many of the components of their volume that are paper are going to take some more compelling digital form. They have to be more than just passively friendly to this. I think they have to be all over it," said Robert Hamilton, former head of FedEx.com, the shipping company's online business, and co-founder of ProofMark, a developer of software that allows companies to track the handling of electronic documents. Two categories of companies stand to profit from the trend. The first is established e-commerce security companies such as VeriSign Inc. and Entrust Technologies Inc., which provide universally recognized digital certificates -- a sort of digital ID card that can be stored in the owner's computer, in a secure network or on a smart card. The certificate -- a unique, encrypted code -- lets consumers prove their digital signatures are valid. The second group includes dozens of companies, such as Irvine, Calif.-based signOnline, that will sell technologies and services that let individuals and businesses affix a signature to a document and store the original in a secure setting. Most of these companies are small and barely out of the startup stage, but big businesses, including UPS and Sony Corp., are also getting into the act. Signature technology generally is based on encrypted mathematical codes that are attached through a series of mouse clicks to documents by the parties in a transaction. A few companies provide hardware that allows users to record their actual signature using an electronic pen and pad. The pad not only measures the signature pattern but also how much force is used and how quickly the signature is written for comparison with the original. Sony offers a product that digitally records a user's fingerprints. The user then can access his digital signature only after placing a finger or thumb on a scanner, which compares the real print with the digital version. Before the federal law was signed, digital signatures were already legal in more than 40 states, and a number of companies are using them. Since March, online brokerage ETrade Securities Inc.'s customers have had the option of using digital signatures to open accounts, bypassing the hassle of signing and mailing paper documents. In a Florida pilot program earlier this year, Baltimore-based eOriginal Inc. claimed to have shaved $750 from the cost of processing a home loan by eliminating paperwork fees. GMAC-Residential Funding Corp., Mortgage.com and e-cloz.com were partners in the test. Courts in Salt Lake City have accepted digitally signed documents since March through a system set up by Utah-based iLumin Inc. UPS launched an e-signatures business in 1998 with the expectation that digital technology would pinch its document-delivery business. Because e-signatures were not legal in every state, customers were reluctant to use it, said Kim Marchner, who ran the service before becoming manager of UPS's small business unit. She expects the federal legislation to change things. "I think we have the opportunity to make the standard," she said. "That's kind of the position we've taken. We're not sitting back to wait and see." Officials at Federal Express declined to comment on whether they are developing an electronic-signatures business. In the long term, FedEx will have to offer the technology or face losing business, Hamilton said. Initially the use of digital signatures for online purchases will boost FedEx's business, as did the advent of the fax machine. "New things being done online will produce movement in the real world that will involve trying to ship physical things," he said. "Only in the medium and longer term will there be some flattening of volume."