What is a Telegraphic Transfer? What's the difference between TT vs wire transfers (SWIFT)?

Adam Rozsa
04.05.22
4 minute read

There are plenty of reasons you might want to make a payment electronically.

In any case, you may have come across the term telegraphic transfer, also referred to as telex transfer, T/T, TT or TT payment. 

We’ll explain everything you need to know about the different terminology used, as well as the difference between telegraphic transfers and wire transfers.

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How do telegraphic transfers work?

In simple terms, telegraphic transfers involve money going from a sender, and passing between several banks to reach their recipient.

Telegraphic transfers are typically more expensive than other transfer services because the banks which are involved in the transfer, also known as correspondent banks, set their own fees and processing times.

For that reason, transferring funds between individuals and businesses can become quite expensive and time-intensive - it will typically take 1-2 days for a transfer to be processed.

These correspondent banks all work together to form the Society for Worldwide Interbank Financial Telecommunication (or SWIFT) network - which we’ll come back to later.

This network is important because payments will only pass between banks that have commercial relationships with each other. 

Telegraphic transfers pros & cons

Although this method of payment is one of the oldest and most established services, telegraphic transfers aren’t without their weak spots.

Here are the pros and cons:

Pros

  • Easy-to-access: They’re extremely convenient. You don’t need to create a new account to make a transfer, you can simply use your bank account directly from your app and browser, or visit your bank in-person
  • Make large payments: Telegraphic transfers typically have much higher limits than newer transfer services
  • Security: Making payments directly through your bank provides a greater sense of security that your money is being handled safely

Cons

  • Costly: Since most payments go through multiple banks, the sender can end up incurring hefty fees in the form of exchange rate margins, landing fees, and so on 
  • Time-intensive: The biggest drawback is that payments can take a while to process. In some cases, particularly with international payments, a payment will need to go through several banks before it reaches its recipient, which can lead to delays.

What are the fees of TT payments?

As with most payment services, there are a few different fees attached to this method of transfer including:

  • An arrangement fee that the bank will charge for organizing your transfer
  • Fees that will be taken by the correspondent banks as your money moves through the SWIFT network
  • A currency spread or markup added onto the exchange rate
  • Final costs that will be charged by the recipients bank
💡 You can find out more about telegraphic transfer fees and telegraphic transfer buying rates on our website.

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Telegraphic transfer vs wire transfer: What’s the difference?

While you may not be as familiar with telegraphic transfers, you've more than likely heard of wire transfers. To understand why there are so many different terms for the process of moving money from one account to another, you need to know a bit about the history of banking.

Bear with me - I’ll make it short.

As more people were moving more money, banks realized that they needed a globally recognized system to make sure all transfers ended up in the right place.

So, in 1973, SWIFT was founded. SWIFT is the network which sits behind thousands of banks, making millions of international money transfers every day. It offers a standardized, global way of safely sending money around the world - although the service comes with fees, which are payable by customers.

Telegraphic transfer is now used as a catch-all term for methods of moving money between accounts, both locally and internationally, while SWIFT payments - or international wire transfers - are specifically those money transfers which use the SWIFT network, to move money between accounts based in different countries.

How do I make a telegraphic transfer?

There’s no singular process for making telegraphic transfers, as it varies between banks, but generally, the process is as follows:

  1. Check online, or call your bank, to find out if they allow you to make telegraphic transfers online. If not, you’ll need to visit your bank in person.

  2. If you're making your transfer online, you'll need to log into your online banking and look for the telegraphic transfer section. Banks refer to this service under different names, so look for something along the lines of ‘Telegraphic Transfer’, ‘International Payment’, ‘Wire Transfer’, or ‘Send Money Overseas’.

  3. If you’re making your payment at the bank, the teller will assist you with the process. Be sure to take your bank details, as well as the recipient's details; you’ll need to provide their name and basic bank details - often an IBAN and BIC/SWIFT code, but your bank may also require their address, and even their bank’s address.

  4. Check the cost of the transfer before you confirm. Your bank should be able to tell you the fee they’re charging, but bear in mind that the intermediary bank may deduct their fee directly from the payment as they process it.

  5. Finally, once you're happy with the terms of the transfer, you can confirm it and your money will be on its way to the recipient.

Bottom line

Ultimately, telegraphic transfer, and the SWIFT system, is a sophisticated and important process that connects people all over the world. While it's secure and easy-to-use, the biggest drawbacks are its fees and the speed of payments.

This is one of the reasons why alternative transfer services such as Wise are worth considering. Wise always moves money at the real mid-market rate, so there are never hidden fees from marked-up exchange rates.

You’ll just need to provide some of the same information you'd need to make a telegraphic transfer, and pay a small transfer fee that’s stated upfront, and your money will be on its way. It’s fast, easy, safe and is often significantly cheaper than a bank transfer.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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