Encryption allows you to make sure that only the people receiving your information can read it, but it does not ensure that you are who you say you are. A hacker can easily set up a site that uses the most advanced forms of encryption, but displays a false identity to visitors, making them believe they are communicating with someone else. Data encryption is not enough to protect your visitors from malicious people.
SSL certificates issued by a Certification Authority also provide a service to prove that you are the one to advertise yourself. Certification Authorities are established suppliers with worldwide renown and trust. Once your identity is verified by their services, they will add their own public key to your certificate in order to certify to your visitors that your identity has been verified and that it is part of the encryption process.
The degree of verification of your identity depends on the type of certificate you have purchased. A standard certificate just checks a certain record in the DNS of your domain in order to validate the control you have over the domain. A more advanced certificate will verify identification records that you provide. The more advanced SSLs are the most expensive to buy, but they are also the ones that will provide a higher degree of confidence to your customers who will entrust their private data to you.