Securing E-Commerce with Digital Signatures

Today’s booming e-commerce sector has been a long time in the making. Its emergence coincided with the development of the internet. In Indonesia, the development of e-commerce in the early 2000s was marked by the emergence of various online platforms that became a forum for public transactions in cyberspace.

The emergence of these platforms attracted the attention of not only the public, who were enthusiastic about buying and selling online, but also the government, which drafted the e-commerce law in 2001. At the beginning of this development, several directly related parties such as banks and merchants had minimal capabilities to secure transactions.

The company that pioneered the security of e-commerce transactions was VISA, which developed a 3D Secure system, namely messages that use the VbV protocol and authentication. This system helps to minimize fraud, and is still fit for purpose after fifteen years in operation.

However, the increasing flow of information and the internet has also made e-commerce more rapid, while fraud is on the rise. There is a need for new types of security systems to meet the new challenges. Today's society also has more choices when it comes to shopping online. One feature that is able to maintain the security of online transaction data today is a certified digital signature.

Benefits and Uses of Digital Signatures in Securing E-Commerce

Digital signatures are often used by e-commerce players to secure important consumer data and company or merchant data. Common uses include:

1. Data Validation and Verification During Transactions

The main benefits and uses of digital signatures in e-commerce are to secure the data of anyone who logs on to the merchant's website and makes transactions. This digital-signature platform can also prevent or minimize fraudulent actions that harm companies, merchants (sellers) and users (buyers).

2. Easier Operation

Digital signatures can facilitate merchant operations in conducting transactions, signing cooperation contracts with other institutions and individuals, as well as the government. For transactions, for example, the merchant only needs to make proof of the transaction which will be signed by the buyer.

That way, the seller can more quickly deliver the goods to the buyer. Vice versa, buyers do not have to wait long to get the desired goods without being involved in time-consuming administrative matters.

3. Can be used as authentic evidence in the eyes of the law

As well as serving as proof and verification when logging into a merchant account, digital signatures can also be used as a form of valid authentic evidence; for example, in case of theft or data falsification, where your data can be used as proof of settlement in a court of law.

Several countries already have related laws and regulations in place. In Indonesia, Article 1 Paragraph 12 of Law no. 11/2008 on Information and Electronic Technology regulates the principles that must be contained in an electronic transaction certificate.

Case Study: Using Digital Signatures for Digitizing MSMEs

As explained above, digital signatures and digital identities have a positive impact on the development of e-commerce. Interestingly, it is not only financial and banking companies that can apply it for transaction security. Micro, small and medium enterprises (MSMEs) can also use it as an important part of their digitization process.

This is what PT Indonesia Digital Identity (VIDA) did in early June 2021. In collaboration with PT Bhanda Ghara Reksa (Persero) or BGR Logistics, VIDA provides a technology solution for verification and authentication of stall data on the Warung Pangan BGR Logistics application.

BGR Logistics is part of the 'Neighbourhood Warung Shopping' program launched by the Ministry of Cooperatives and SMEs (Kemenkop UKM). Through the provision of verification and authentication technology solutions, VIDA supports the Kemenkop UKM program.

Warung Pangan is an application used by MSME actors, including traditional stalls and shops, to buy basic necessities at competitive prices. It can thus be said that Warung Pangan plays a role as e-commerce for SMEs. Through the Warung Pangan application, shop and shop owners can access product supplies in a practical way and at relatively affordable prices.

As a safe and reliable verification and authentication technology partner, VIDA supports the Warung Pangan application by maintaining data security on transactions made by traditional shop and shop owners. In this way, the competitiveness of the MSME sector will increase so that business owners can continue to develop their businesses more productively and efficiently.


From the above review, it can be concluded that digital signatures are an important and inseparable part of e-commerce security. This has become even truer during the current pandemic, which has seen people preferring to shop online in order to help check the spread of COVID-19.

This digital signature is a breath of fresh air for companies engaged in e-commerce to better provide data security features for their consumers, and encourage them to feel more comfortable when shopping, thereby increasing their level of satisfaction.

For government institutions, digital signatures will make it easier for e-commerce players to access important licensing data safely. Also, when there are legal problems in the realm of e-commerce, digital signatures can be used as legal authentic evidence.

If you are a player in the digital economy and are engaged in e-commerce, you should consider choosing PT Indonesia Digital Identity as your business partner in consumer digital data verification services.

We hope it is useful!

Read: Understanding the Principle of Non-Repudiation with Digital Signatures

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