What is a telegraphic transfer?

Sending and receiving money overseas is crucial for any global business. It’s worth understanding the pros and cons of the different transfer methods available to ensure you always get the cheapest rate.

If you’re already managing money in multiple currencies, sending funds across borders, or even making domestic payments, it’s likely you’ve already used a telegraphic transfer without ever hearing its old-fashioned name.

Also known as a telex transfer, a TT, or a TT bank payment, this electronic transfer method wires money both domestically and internationally. Because they are so ubiquitous and often used to send money across borders, TTs are sometimes referred to generically as wire transfers, overseas transfers, or electronic fund transfers.

Although they still exist in digital form today, the idea behind telegraphic transfers originated in the 19th century. Telegrams and telex messages were the text messages of their day, sent electronically and then passed to the reader in physical form. In the past, banks would use these systems to communicate with each other and arrange a bank transfer.

Although the telegraph itself is now obsolete, this was the foundation for the system we have today. Nowadays, funds are transferred electronically via secure cloud-based apps or cables connecting banks, but the name Telegraphic Transfer remains in use. 

How does this type of payment work?

When you send a telegraphic transfer, the payment passes through several networked banks before it reaches your recipient. 

In Canada, high-value or time-critical domestic transfers are processed through a system called Lynx, which ensures same-day settlement. Lynx is useful for urgent and large transactions, similar to the UK's CHAPS.

The other common type of Canadian money transfer system, Electronic Funds Transfer (EFT), is not considered a type of telegraphic transfer. EFT payments are processed in batches and typically take 1–2 business days to clear, so it's a common misconception that they fall under the telegraphic transfer category.

Internationally, money can be transferred by telegraphic transfer via the Society for Worldwide Interbank Financial Telecommunication (SWIFT). For this reason, the terms telegraphic transfer and SWIFT transfer are sometimes used interchangeably. 

SWIFT was launched in 1973 to make it easier to send money overseas. It standardised the system to make it quicker and less error-prone. 

How do you send money via telegraphic transfer?

To dispatch money via telegraphic transfer, the sender needs the recipient's account and routing numbers and financial institution.

If you’re sending money internationally, you may also need the recipient’s IBAN number or SWIFT code. These help ensure that ‌funds arrive in the correct bank account.

Personally identifiable information is also required to confirm the sender's identity for security purposes.

Most financial institutions will allow users to send telegraphic transfers through their online banking account. If you are sending money abroad, search for ‌sections marked with words such as “international payment” or “wire transfer.”

What are the fees for this type of electronic money transfer?

The cost of a telegraphic transfer in Canada varies depending on the financial institutions involved and the amount being transferred. Each bank or intermediary through which the funds are passed has its own fees and processing times.

In total, you can expect to pay between CAD $10 - $50 for a wire transfer within Canada or internationally. Also, exchange rates can add extra cost if you send money internationally. Large retail banks in Canada may charge up to 2.5% to 3.5% above the interbank rate for currency conversion.

Telegraphic transfer fees are often so opaque that senders aren’t aware of the full costs until the transfer is complete. Compared to other electronic payment methods, telegraphic transfers are fairly expensive, but the tradeoff is that they happen relatively fast. Usually, the payments are received within one or two days. 

Airwallex offers cheaper, faster international transfers

TT payments may no longer operate through telegrams but are still based on a centuries-old system. 

Luckily, this type of payment is no longer the only option for sending money overseas. The digital revolution is here, and Airwallex is at its centre.

Airwallex uses a network of local banks and payment routes to make sending money around the world faster and cheaper for businesses. With an Airwallex foreign currency account, you can receive, hold, and send multiple currencies​ — including USD, Euros, GBP, and HKD​ — from your global business account without transfer fees. 

Airwallex offers market-beating exchange rates of 0.5 - 1% above the interbank rate, much cheaper than the high street banks. And because we sidestep the SWIFT network where possible, your money will likely be received in one business day or less.

You can also save on international expenses by using Airwallex’s virtual debit cards. Create virtual cards in minutes, and make purchases all over the world with zero transaction fees.