What is a telegraphic transfer?

Sending and receiving money overseas is a crucial part of any global business. To ensure you always get the cheapest rate, it’s worth understanding the pros and cons of the different transfer methods available.

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 the US, one type of telegraphic transfer uses a network called the Fedwire Funds Service. Fedwire payments are typically carried out on the same day and are useful for high-value or time-critical transactions.

The other common type of US money transfer system, ACH (Automated Clearing House), is not a type of telegraphic transfer. It is a common misconception that ACH payments fall under this category. ACH payments are processed in batches, typically settling within one to two business days, and are commonly used for payroll, bill payments, and other routine transactions.

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, as well as their financial institution.

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

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

Most financial institutions will allow users to send telegraphic transfers through their online banking account. If you are sending money abroad, search for the 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 varies depending on the financial institutions involved and the amount transferred. Each bank the funds pass through has its fees and processing times. 

In total, you can expect to pay between $10 - $50 for a telegraphic transfer. That’s on top of exchange rates, which can be as high as 3.5% above the interbank rate if you use a large retail bank to make the transfer.

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

Airwallex uses a network of local banks and payment routes to make sending money worldwide 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 traditional banks. And because we sidestep the SWIFT network where possible, your money will be received in one business day or less in most cases.

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.