TT payment: meaning and definition
Confused about what a TT, T/T, telex or telegraphic transfer is? You've come to the right place. Read on.
If you’re sending money abroad, options can get overwhelming. Fast.
At TransferWise, we believe that finance needs fixing. Financial services should be fair, transparent, simple, and built to serve customers, not banks’ and providers’ interests.
We feel money, people, and ideas are all better without borders. Truly.
TransferWise is the new way to move your money around the world, as easily as possible, for as little as possible. But don’t take our word for it, read on to see how TransferWise is different.
Whether you’ve been sending money abroad with your bank for ages or you just started and want to explore your options, what you may not realize is there are more ways than ever that you can send money overseas.
That last one, the peer to peer method, is where TransferWise and new money transfer players come in. And it’s also the secret behind why companies who use that method can often save you up to 8x the amount charged by your bank. But more on that later.
If you send money internationally with your bank, it’s almost guaranteed that when they send your money, it’s via SWIFT (Society for Worldwide Interbank Financial Telecommunication). Don’t let the name fool you, though. SWIFT transfers aren’t known for their speediness.
Because banks nearly always send international transfers via SWIFT, that’s what we’ll call them from here on out.
Some banks are small. Some banks are big. Some have lots of connections. Some have very few. This is where SWIFT comes in. A bit like a connecting flight when you can’t find a direct one, SWIFT transfers allow banks to send money all over the world by, often, using intermediary banks. Safe to say, when it was created in 1973, it made life a lot easier for people who lived and worked across borders.
But that was 1973. SWIFT transfers are still the norm for international bank transfers, and that comes with a price. Many bank customers don’t realize there are many more fees involved than they’d suspect. But if there’s only one small upfront fee, what more cost could be involved?
Count them. Because they add up.
That’s at least 3 different costs - one of which isn’t ever mentioned by the banks. And if you’re the unlucky soul that has 3 intermediary banks, each one of those banks will take their cut.
It is comforting to know, however, that you will almost always have the option to pay all the fees yourself, have your recipient pay all the fees, or split who pays what. But that still doesn’t change the fact that the costs exist. And someone’s paying them.
If you’re still curious about what these costs actually mean in real terms, here’s the breakdown in a bit more detail.
This is often the fee your bank will actually tell you. It’s normally outlined quite clearly in your fees section on your bank account. It can vary quite a bit, but often it’s one flat fee, so it can seem quite reasonable.
This part can get painful, because normally customers don’t see it coming. There’s a decent chance your bank won’t need to use an intermediary bank to get your money from one country to another, especially if they have a strong international presence. And in those cases, you’re safe.
But if you’re not one of those lucky ones, you can expect anywhere from 1 to 3 intermediary banks to take a chunk out of the money you’re sending. The good news is that the fee is flat and shouldn’t vary if you’re sending more money. But, again, a fee is a fee. And that’s rarely good news.
Currency exchange rate markups are nearly always hidden. Companies don’t like to talk about them. Banks don’t like to warn you about them. Tables with fees and costs don’t like to spell them out to you.
The worst part about them is that you almost never know the costs were there. If you’re sending money via the SWIFT system, it won’t be your home bank that makes this currency exchange. If there are only two banks involved, it’ll be the recipient bank that does the switch from one to another. If there are intermediary banks, often it’ll be one of them that does the exchange.
Regardless of who makes the exchange, they won’t be using the mid-market rate. This is the exchange rate banks use when they exchange currencies with each other, and you can find it on Google. They adjust the rate to benefit themselves, and take a slice of extra profit. It’s a fee they won’t tell you about - a hidden fee.
Thankfully, this cost is often very clearly spelled out. The recipient’s bank will take their fee. The SWIFT system isn’t free to use, so it does make sense that a bank would charge for its use.
Convinced yet that your bank transfer may be more expensive than you thought it was?
Remember that peer to peer thing mentioned earlier? That’s the first major difference between TransferWise and regular international bank transfers.
With TransferWise, there are bank accounts all over the world. Local ones. With local currency. Which means you won’t have to use intermediary banks to get your money from one country to another. And you won’t be charged any additional international transfer fees by your bank.
You send TransferWise your money locally. And then local people just like you who are sending money the other way end up funding your transfer to your recipient in another country. It’s connecting people’s money. It’s connecting people.
In fact, that’s how TransferWise got started.
Taavet worked for Skype in Estonia, so was paid in euros, but lived in London. Kristo worked in London, but had a mortgage in euros back in Estonia. They devised a simple scheme. Each month the pair checked that day’s mid-market rate on Reuters to find a fair exchange rate. Kristo put pounds into Taavet’s UK bank account, and Taavet topped up his friend’s euro account with euros. Both got the currency they needed, and neither paid a cent in hidden bank charges.
“There must be others like us," the epiphany went.
And the rest is TransferWise.
It showed them firsthand that sending with their bank wasn’t the only way. With a little help from a friend, those surprise costs and hidden exchange rate markups could be avoided. At TransferWise, we feel all costs should be upfront and transparent. We’ve even begun legislation and petitions in several countries to ask governments to make banks and money transfer companies do just that. Expose those hidden exchange rate markups. Tell their consumers what international transfers are really costing them.
As a result, TransferWise puts the fee you’ll be charged at the very beginning. Before you even sign in. We want you to know exactly what you’ll be paying. And exactly what you’ll be getting.
But even making fees clearer wasn’t enough. We wanted to make sure regular, everyday consumers got the same benefits as the high street banks when it came to money exchanges. TransferWise gives everyone the mid-market rate, the same rate you’d find on Google. And like our fee, it’s shown to you right at the start. We even have a currency calculator so you can check the rate right now.
One admission though - we do still have to send to South Africa via SWIFT, and we’re working on fixing that. Sorry South Africa.
Still not sure about which one is cheaper? Maybe a table will help.
|Type of fee||International bank (SWIFT) charges||TransferWise charges|
|Sending transfer fee||Varies - often ranges from US$10-US$35||0.5% - 2.5%|
|Intermediary bank fees||Yes - they vary depending on the intermediary bank, and how many banks your money passes through||Absolutely none.|
|Exchange rate markup||Yes||None. We give you the real rate.|
|Recipient transfer fee||Varies - often ranges from US$0 - US$9||None. (TransferWise only sends and receives local bank transfers.)|
We know you’ve probably been working with your bank for a long time. We know it’s hard to make changes. We know it feels easy to go with what you know. So why change?
With TransferWise, you actually don’t have to stop working with your bank. You’ll still need them to make a transfer into our system. The difference is, you’re sending money locally from your bank to our bank in your country, so it costs the same as a domestic transfer normally does. In many cases, you can even pay your money to us by debit or credit card, or one of our localised payment methods.
And you have the option to do all of this via one of our apps, so you don’t even need to be in front of a computer when you make a transfer.
|Transfer provider||Offer in person/phone transfers?||Offer online transfers?||Offer mobile app transfers?||Offer peer-to-peer transfers?|
|Banks (via SWIFT)||Yes, the majority of banks even prefer this for international transfers.||Yes, a lot of banks will let you make transfers online. These might come with small limits and more security checks.||Yes, most banks now have an app, although making international transfers with them can be a bit tricky.|
|TransferWise||No, we’re an online only business.||Yes, absolutely, it’s our bread and butter.||Yes, we’re really proud of how easy to use our apps are.||Absolutely, a lot of the transfers we make are peer to peer.|
If you’re making an international transfer with your bank, you’ll normally need your recipient’s IBAN and SWIFT code. But with TransferWise, you simply need their local account details, or even just their email address in many cases if they’d prefer not to give out their bank details. Much more convenient.
|Recipient information||International bank (SWIFT) transfer recipient||TransferWise recipients|
|Recipient needs an account?||N/A||No, the recipient doesn’t need a TransferWise account.|
|Sender needs a bank account?||Yes.||Yes.|
|Recipient needs a bank account?||Yes.||Yes, recipient needs to have a local bank account in the country where the currency is used.|
|Recipient details needed?||Recipient’s bank details, including their account number and SWIFT/BIC code.||Local bank details for that country or, in many cases, just the recipient’s email address.|
|Recipient can receive in currencies other than what is local to that country?||Yes, if the recipient bank account supports that currency.||No, TransferWise only sends money in the local currency of that country (the exception is US$).|
Perhaps one of the best parts of a SWIFT transfer is that the money, or what’s left of it, will be paid directly to your recipient’s bank account. So there’s no need for them to go to a collection point to get cash, or sign up for any special accounts just to receive the money.
The same goes with TransferWise. Your recipient will need a bank account in the destination country in the currency that’s local there. Straight to their account. Ready to use.
Obviously, you can trust your bank with your money, as they’ve been at this for years. As has the SWIFT network.
Just like a bank though, TransferWise is a regulated financial institution, authorised by the Financial Conduct Authority as an Electronic Money Institution.
You can check out all the information about our licenses in different countries in our support centre.
Making an international transfer should be a simple thing, and it shouldn’t cost you the earth to move money around it.
Using TransferWise, your money will get there quick, safe, and both you and your recipient won’t be losing out.
Don’t believe us? Give it a try and find out.
Confused about what a TT, T/T, telex or telegraphic transfer is? You've come to the right place. Read on.
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