Guide to what is telegraphic transfer and how it works?

Apr 05, 2024

Sending money abroad becomes a crucial part of business for any company that starts expanding its operations into foreign territories or one that deals with many international vendors or clients. This is where telegraphic transfers also known as TT payments come into play.

Telegraphic transfers are probably one of the oldest forms of electronically communicating a monetary transaction between the sender’s bank to the recipient’s bank account. Back when this method was first invented, the process happened through cables or telegraph lines.

Today, while we don’t use telegraphs anymore, the term ‘telegraphic transfer’ has stuck around and become synonymous with other forms of electronic fund transfers.

How do telegraphic transfers work?

Telegraphic transfers today use bank networks such as SWIFT(Society for Worldwide Interbank Financial Telecommunication) in order to transfer money from the sender to the recipient. This network contains many partner banks known as correspondents. Funds flow through correspondent banks via the SWIFT network.

Depending on the originating bank and the sender’s currency and the receiver’s bank and their currency, the transaction may pass through 2-3 banks before reaching the recipient. This can take anywhere from 1-3 days depending on the complexity of the transaction. 

Each correspondent bank has its own transfer fees that it levies as the transaction moves through the network. So the sender must keep in mind that small percentages of a transaction will be cut by the correspondent banks during the transfer apart from the fee that they paid their own bank in the first place. 

The term TT payment is still commonly used in Australia, New Zealand, and the UK, whereas in America and other parts of Europe, this type of payment is used interchangeably with the term wire transfer or international money transfer.

Telegraphic transfer vs wire transfer: Understanding the difference

Telegraphic transfers and wire transfers are both a type of electronic transfers. The only difference is that a telegraphic transfer may or may not happen through the SWIFT network, while a wire transfer happens through the SWIFT network. 

Before SWIFT was established and became one of the most prominent bank networks in the world, wire transfers and telegraphic transfers were slightly different in the way they were carried out.

But today, both terms are used interchangeably depending on the region you are in. When globalization took place all banks started realizing the need to have a global system for transferring money from one country to another.

With the aim of making international transactions easier SWIFT was established in 1973. The SWIFT network contains thousands of banks across the globe that make countless transactions every day.

This enabled businesses and individuals to opt for a globally recognized and safe way to transfer money to people and companies in different countries. 

How funds are processed via telegraphic transfer?

Depending on the country you are in and the bank you have an account with, you’ll have to check how they process TT payments through their online portal or by contacting a bank representative.

1. Process of initiating TT payment

The first thing you can do is check your local bank's app or website. You will find the option to make a TT payment somewhere within their portal. It might be under a different term such as ‘wire transfer’, ‘international money transfer’, or ‘send money overseas.’

If you do not find any of these options on your bank’s website or app, then you must go through the offline process of contacting a bank representative who can help you out with sending money internationally by submitting the necessary documents and fees in the local branch of your bank. 

2. Details required

Generally, the details listed below are needed to initiate a telegraphic or wire transfer.

Payee details

Your name or the person you're sending money on behalf of, your bank account number, and your personal address.

Transfer details

The amount you want to transfer, the currency you want to transfer in, and the reason for the transfer.

Recipient details

Lastly, you must also provide the receiver’s bank name, the address of the bank, the IBAN/SWIFT Code, the recipient’s international bank account number, and the recipient’s account name. 

3. Total processing fees of telegraphic transfer

Bank transfer fees

This is the fee that the sender’s bank will charge in order to initiate the telegraphic transfer. Depending on the bank you have an account with, this fee will either be a percentage of the amount you’re transferring or a fixed amount.

Intermediary bank fees

As a telegraphic transfer passes through the network, each bank/correspondent that it stops at will cut a certain amount from the transferred money as part of their service of moving the money ahead in the network.

Exchange rate margin

When you’re transferring money from one country to another, a change in the currency will have to happen in order for the transaction to be carried out successfully. This exchange rate is often decided by the current market rates and will be charged at the point of currency conversion. These rates can be as high as 3.5% in some cases.

Receiving bank fees

The recipient’s bank will also charge a small fee in order to process and fulfill the transaction that was started by the sender. All in all, you can expect to pay a transfer fee of anywhere between $18 to $30 USD excluding the currency conversion charges. 

4. Processing time

The processing time for a telegraphic transfer or wire transfer is generally anywhere from 1 to 3 working business days. 

Want to make international money transfer?

Key advantages of telegraphic transfer payments

Ease of creating payments

A telegraphic transfer or wire transfer is one of the most common types of electronic money transfer methods known to us today.

Being a globally recognized and standardized method of transferring money makes it easy for any individual or business to create and process such payments. 

Supports large amounts of funds

Unlike some other niche methods that many local banks or financial institutions follow, the wire transfer is a payment method that supports transactions of a large magnitude.

This makes it suitable for big corporates and businesses to use the system for transferring huge sums of money.


SWIFT is a global network of banks and thus has ensured that their systems are upheld with the best security protocols possible.

Since telegraphic transfers now use the SWIFT network, you can be sure that your money is safe and always trackable so you know where your money is and stay updated with the payment status.

Disadvantages of telegraphic transfer payments

High charges

The safety and security of your money when processing a telegraphic transfer through the SWIFT network come at a cost.

Charges and fees are levied by the sender’s bank, intermediary banks within the network, and the recipient’s bank. This makes using a telegraphic transfer a costly affair.

Processing time

The second disadvantage of using telegraphic transfers is the time it takes for the money to reach the receiver.

While 1-3 days might not seem a lot, in the world of business, it can have a huge impact on the cash flow of a company when payments are delayed due to the long processing times.

Save more on your business international payments with Volopay

Businesses will always be looking for ways to optimize their resource utilization. When it comes to international money transfers, companies did not have a lot of options until tools like Volopay came along in the market.

Volopay is an all-in-one expense management software that allows you to track, manage, and control all your business payments and expenses through a single platform. 

How we can help you save money on international payments - We offer businesses multicurrency wallets that they can use to make payments in 60+ currencies in over 100 countries. 

The way it works is that you can load money onto Volopay’s platform in different currencies such as USD, SGD, EUR, JPY, etc., and hold it in separate wallet accounts.

Now, whenever you want to make a payment to a vendor in a different country, you can use the amount you have in the respective currency wallet and transfer money from there directly to the recipient. 

This way you’re able to save the currency conversion charges that you would have to pay each time you want to make an international transfer.

Sign up for a demo and know more about our platform and how we can help your business streamline company expenses and save a lot of money.