News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

The CNP Spotlight – SignatureLink – July 2010

The CNP Spotlight: SignatureLink

By Staff

For nearly as long as there has been writing and contracts, someone who has made his mark on an agreement has been obligated to follow through with its terms.   In commerce and the law, an ink signature on paper is a guarantee that the person adopts the intentions recorded in the document. By their very nature, however, card-not-present transactions are not as certain. A company in the Deep South, though, has devised a solution that brings “wet” signatures to the e-commerce world.

SL SignatureLink Inc., based in Ridgeland, Miss., has developed an electronic signature that is Electronic Signatures in Global and National Commerce Act (ESIGN) and Uniform Electronic Transactions Act (UETA) compliant. In short: it’s every bit as legally binding as pen on paper.

“SignatureLink does one thing and does it really, really well,” Chito Collins, lead sales and marketing consultant for SignatureLink, tells “It enables anyone to write a handwritten equivalent signature on an Internet browser, using a mouse, a pen tablet and now, in the age of the iPad and touch screen technology, your finger.”

Fighting ‘Friendly’ Fraud

The company, founded in 2002 and subsequently acquired by Mississippi-based investment firm Cypress Funding, serves a broad array of industries including legal, insurance, financial, transportation, healthcare, public sector, real estate and many others—any industry where a legal signature is required as part of a business process that also benefits from an electronic medium. But, one of the industries where SignatureLink’s technology could have significant impact is in e-commerce.

The company is marketing its service as a strategy to combat “friendly” fraud (where consumers knowingly purchase a product or service then dispute the purchase, initiating a chargeback scenario). Collins says SignatureLink’s electronic signature helps reduce friendly fraud and, consequently, revenue lost to chargebacks in two ways:

“We’re reducing online payment fraud psychologically when someone who might consider charging a purchase online and claiming it wasn’t them sees they have to sign their name and they just say ‘I’m out of here.’ In those cases, the fraudulent transaction never occurs,” explains Collins.

“When the transaction does occur and the chargeback is initiated, our client can produce a signature along with a date and time stamp and the IP address of the computer on which the purchase was made along with other pieces of forensic information,” according to Collins. “This helps merchants stand a fighting chance of winning the dispute. It gives them their second leg back. Today, they’re hopping on one leg and the fraudulent consumer is running on two.”

Easy Integration

The signature pad is rendered on a merchant’s Website as the familiar “X___________” where the consumer can literally sign on the line. The application is Flash-based (HTML5-based for Apple products) and, Collins says, could not be simpler to integrate into a retailer’s site.

“The Flash code is basically copy-and-paste,” Collins explains. “It’s an in-the-cloud solution. We provide a reference that our customers embed in their web page. We basically send an email with some JavaScript. They open up their shopping cart and put the line of code wherever they want to position the signature pad. Viola”

Addressing Concerns

SignatureLink’s e-commerce clients include individual merchants, but the company is also going live this month with a well-known online payments processor that plans to offer SignatureLink to its more than 30,000 merchants as a value-added service. The company has introduced the service to some of the biggest national names in e-commerce, which have shown some interest, according to Collins, but will let smaller players serve as a proving ground for now.

Collins notes that concerns of prospective clients fall into two general categories: will consumers abandon the shopping cart because it’s an extra step or they’re afraid to sign? And, will the signature really stand up in a chargeback situation if it doesn’t look like a “real” signature?

In a case study SignatureLink did with a key client, that hosts a Website for investors, Collins says the client reported that abandonment was not an issue.

“Their customers actually found the signature process interactive and fun,” she says. “It also helps the brand of the merchant. It shows the merchant is going above and beyond with fraud tools to protect not only themselves but also the consumer.”

In regard to concerns that the signatures are not valid because they don’t approximate someone’s actual signature, Collins explains it’s irrelevant. Because SignatureLink’s electronic signature is compliant with the applicable laws, any mark is considered a legal signature and the card networks are lending weight to the added evidence of captured signatures and awarding more disputes to merchants in cases where SignatureLink is employed.

“This is a human-centric process, it’s a real handwritten signature and it’s admissible in court,” she states. “We’ve had attorneys validate this to make sure our process is such that we can claim 100 percent validity and compliance with the ESIGN and UETA laws.”

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Daniel Leibovitch