Limitations of Dynamic Time Warping (DTW) highlighted for online signature verification problem. The first work of its kind that analyzes the characteristics of the warping path, using Vector Quantization (VQ). Proposal for enhancing the performance of DTW based online signature verification using VQ. Proposal of inclusion of contextual information to the enhanced DTW strategy. Efficacy of the methodology is tested on the well known SVC 2004 and MCYT 100 database.