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Hamed Shahbazi had a great idea, a business that met a pressing need in the U.S. financial services market. His Burnaby, B.C., based company, TIO Networks Corp., provides self-standing kiosks and third-party cashiers that let people pay utility and telephone bills with cash.

Unlike Canada's national banking system, the U.S. has state-chartered banks. And unlike Canada, where having a bank account is as common as a health card, many Americans have neither. As a result, Shahbazi's kiosks are in great demand.

To date, he has set up about 900 of those kiosks and 150 third-party agents; the agents are mainly in convenience stores and franchised offices of cellphone companies like Verizon. The downside is that bill paying is a volume business. He charges a small fee to his cash customers but to turn those fees into a tidy profit, TIO needs volume.

Volume, in turn, means many more machines and many more third-party agents. The speed with which he could install new kiosks or sign up new agents was limited by the speed with which paper could be shuffled. Since 2001, when TIO entered the bill-paying business, it relied on faxes to transmit leases and clerks to file them. Installing new kiosks and signing up agents demanded a signature on a lease. No signature, no binding legal commitment.

Recently, he opted for a novel solution, something that approaches a digital signature, which has been legal in the United States since former U.S. President Clinton signed the Digital Signatures Act in 2000. Approaches is the key word. A better phrase might be a verifiable electronic signature, says Mike Gardner, chief executive officer of Recombo Inc., the Vancouver company that provided TIO's solution. TIO has outsourced its contracts to Recombo, which has automated the contract process. Its software provides surety that the contract is a legal, valid and unaltered document originating with TIO. The lessor either pushes an “I accept” button or one that says “I do not accept.” If the lessor accepts the wording and terms of the contract then stage two begins.

Here, a verification process replaces witnesses to a signature. With a wet-ink document, the witness states that the person signing is who he claims to be and that the signature was made in person. Most important is verification that the signatory is, in fact, the person signing the document.

Recombo replaces witnesses with a series of questions provided by third parties. In TIO's case those third parties are chains such as Circle K convenience stores and Verizon, which have signed with TIO to allow kiosks or agents in their franchised or wholly owned premises. They provide personal details about the local manager or franchise owner, the person legally able to sign the lease.

Once the “I accept button” is pressed, those questions appear on the screen. If the signer correctly answers the personal questions posed, identity is verified. The answers replace a witness. The signed contract then zips electronically to Recombo's databank and Recombo sends management reports to TIO. It also maintains TIO's contract files. “We have been up and running for a month now and it has made a perceptible difference,” Shahbazi says. “Now we only need a single person to administer contracts. We don't have to worry about the lessor making changes to the standard form of contract because they either accept or don't accept and we can send out leases in seconds, not days. “Those faxed leases were the only real impediment to our growth and Recombo has removed it,” he says.

Jon Levitt, a principal in Outside GC LLC of Boston, says verifiable electronic signatures are beginning to reshape the way many corporations conduct basic legal work. His 11-lawyer virtual firm handles general corporate counsel work for U.S. companies on an outsourced basis. He has referred three clients to Recombo for software license agreements.

“It will never replace major contracts,” he explains, “but for simple repetitive work, a verifiable electronic signature can greatly speed up the process, cut costs and be enforceable in the courts.”

In Canada, the situation is different. The governing law includes a range of federal and provincial statutes. Digital signatures must be certified by a trusted third party and, to date, none of those exist for anything outside federal websites.

“What Recombo seems to offer is a verifiable electronic signature,” says Michael Power, a partner in the Ottawa office of law firm Gowling Lafleur Henderson LLP. “It is a case of commerce creating acceptable hybrid solutions in the absence of any established third-party certifying authority. It is not, however a true digital signature.”

To date, Recombo has 17 clients across North America, says Gardner. Major consulting companies use its outsourced service to have employees sign off on policy documents, proving they have read and understand those policies. Financial institutions use it to certify leases. Recombo charges on a per-document basis plus a monthly fee that can be as low as $20 for every user within a client's organization.

“Business has suddenly taken off for us,” says Gardner, “in the old days, business moved at the speed of its mail room. Then it became the speed of its faxes. Now we are entering the days where business can finally run at the speed of e-mail. Our verifiable electronic signatures make that possible.”