The importance of a signature

Whenever we have to withdraw money through a cheque, or buy something with our credit or debit cards, we have to sign a paper. Putting your signature on paper is a given in case of most financial transactions. Signatures are also required on the magnetic strip behind the credit and debit cards without which they won’t work.
Treaties between countries require signatures by the representatives of those states. So why is the signature still important, and where did this tradition come from?
Signatures are in fact a pretty old tradition. Recently, archaeologists uncovered a clay tablet that dates back to 176 BC. It is a marriage contract between two individuals, with their initials on it. The Jewish holy book, Talmud, has a verse that exclusively discusses this aspect of a marriage transaction. It prohibits a mere scribble (like an initial or a shape), and requires the couple and the witnesses to write their name.
The logic is that in case of a dispute arising between the couple, the witnesses can be tracked down for a probable resolution to the dispute. In the 21st century, Jewish Rabbis still decide marriage disputes based on marriage contracts and witness testimonies.
Similarly, there is this rule in the Talmud that applies equally to a transaction that is a mere one cent or of 1000 gold coins, and it’s about properly signing purchase deeds. Islamic injunctions regarding financial transactions are also along similar lines.
Our signatures are basically our IDs, which tells others that it’s us and not anybody else. We now have CNICs and other forms of identification (even those require our signature) to do that, but at a time when these identity instruments were not available, signatures were the only authenticity of a person’s being.
In the Middle Ages, and till the emergence of modern banks, merchants did not carry a lot of money with them since it was dangerous. The easy way was to carry a signed document from a professional money handler from one part of the world to the other part. These money handlers (akin to today’s banks) formed a closely knit network based on kinship.
People of a specific family, who were good at this work, lived in different parts of the world. A signed document from one family member to lend or accept money was enough for the other family member to oblige. Economist Avner Greif has highlighted this aspect very well in his research on medieval trade practices, especially the maghribi traders.
Of course, signatures can be forged. This was a problem in the older times as well as the modern one. In the older times, the professionals who involved themselves in this trade had other subtle ways of checking the authenticity of the signatures (specific mark on the paper, the quality of paper, etc).
In the early days of modern banking, cheques only used to be accepted when clerks used to pull out those bulky registers and countercheck with the original signature. It might seem a time-consuming exercise now, but in those days there were not many people who had bank accounts.
People used to withdraw money only sparely; keeping money at homes was still pretty much in vogue, and the money did not change hands that fast as happens today (in econo speak it’s called velocity of money). So it was feasible to compare signatures through account cards. But as the number of accounts grew, the practice became unfeasible. Instead, the register counter cheques became random. Usually a percentage of signed cheques would be matched with the original ones in order to verify the authenticity.
Modern-day signatures are not as important as they used to be. Their relatively low importance in commercial and financial transactions owes to the fact that there are now numerous ways of detecting fraud other than via signatures. For example, you cannot use a debit or credit card without a pin number.
In case of smaller transactions of credit and debit cards, some people don’t even sign. They in fact draw different shapes or put a cross. But it’s still useful to sign your signatures rather than draw a shape or cut the signature line. That’s because in case you lose a credit card or debit card, or a cheque and it is used somewhere, then the disputed transaction will be resolved through comparing signatures.
So the next time you try to be cheeky and draw a smiley or something in place of a signature, you might just want to state your signature. It’s a tradition that is thousands of years old, and some traditions are worth keeping alive.
The writer is a freelance contributor.
Email: shahid.mohmand@gmail.com
Twitter: ShahidMohmand79