Talk about analog to digital. The analog part? It’s been around for centuries. The digital part? In a way, it’s just getting started.
The notary — he or she who draws up and certifies contracts and acts as an impartial witness — has a genesis that stretches back centuries. In one example, a notary association in England has been around since the 1300s.
The affixation of seal, and stamp, and signature is a process that seems necessarily bound in paper and ink. But the move towards bits and bytes is gathering steam in a bid to bring security to far flung transactions.
Notarize, the notary public platform that allows for the remote notarization of documents online, said Thursday that it raised $20 million in a funding round that brings the tally of money raised, cumulatively, to $31 million. The company’s release detailed the funding as Notarize extends its reach into several verticals, ranging from real estate to banking to construction.
The opportunity in front of the company and remote notarization firms in general is a large one, given the 1.2 billion transactions that are completed annually, representing $32 billion in value, as Notarize has cited.
Initial efforts for that company have been focused on the real estate industry, via Notarize for Mortgage and Notarize for Title Agents. And beyond products themselves that connect all parties to the transaction, online notarization has gained legislative support in states including Texas, Tennessee, Nevada and Indiana — and notaries in each of those states can offer their digital services nationwide. Services in Texas and Nevada go into effect on July 1 of this year, the others in 2019.
In an interview with PYMNTS, Jessica Meher, VP of marketing at Notarize, said that remote notarization helps fill a gap in getting some of the most important transactions — such as buying a home, managing investments or starting a business — off the ground.
“While most processes leading up to these transactions can be done online — searching for a home, securing a mortgage, obtaining a business license — their end result is completely non-digital, requiring individuals to travel to find a notary and sign paper documents,” said Meher. Through remote notarization (and through Notarize, she added), parties to a transaction can save time and reduce fraud. What took weeks now takes minutes, she told PYMNTS — with remote notarization, the time can be shaved by 75 percent.
Among the industries most readily identifiable as candidates for remote notarization: Construction. Meher says this is a business where subcontractors receive payment every month and need lien waivers notarized.
“This is the number one use case we see in construction,” she told PYMNTS. “Also, some construction firms’ permitting process requires notarization (such as notice of commencements, approval of final completion, etc). If any aspect of the permit is incorrect or invalid, the entire transaction would need to be [restarted].”
In reference to data security, she told PYMNTS that user communications are encrypted, an audit trail is in place and the firm is SOC 2 compliant. “We also store the video of the notarization session, showing both the notary and the signer as their document is notarized, to deter fraud and provide a secure record of the entire transaction,” she said. Documents are digitally signed by the notary using a special x.509 digital certificate issued to the notary, she explained, by IdenTrust, a Root Certificate Authority.
“We store a digital record of every notarization in a password-enabled ‘verification portal’ where the customer and any authorized recipient (or others authorized by law) can access a digital copy of the original notarized document along with key transactional information about the notarization itself,” she added.