What Is a Telegraphic Transfer (TT)? How It Works

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A telegraphic transfer (TT) is an electronic bank-to-bank payment used mainly to send money across borders. The sender’s bank transmits a payment instruction to the recipient’s bank, usually over the SWIFT messaging network, and the recipient’s account is credited once the instruction and the funds have passed through the banks involved. In banking and trade documents the term is often written T/T, and “paid via T/T” simply means paid by international wire. Transfers generally complete within two to four business days, depending on the countries, the currencies and the banks in the chain.

Why it is called a telegraphic transfer

The name comes from the method banks once used. An operator sent the customer’s payment instruction to the receiving bank by telegraph, in Morse code, and later by telex, which is why “telex transfer” is another expansion of TT. The telegraph is long obsolete, but the label stuck. More general terms are “wire transfer” and “electronic funds transfer” (EFT).

How a telegraphic transfer works

A TT moves an instruction first and the money second. The instruction usually travels over SWIFT (the Society for Worldwide Interbank Financial Telecommunication), founded in 1973, whose uniform message formats reduced errors between banks in different countries. SWIFT does not hold or move funds itself. The money settles through accounts the banks hold with each other.

1. Request. The sender asks their bank to send a set amount to a named beneficiary abroad.
2. Checks and debit. The bank verifies the sender’s identity, screens the payment and debits the account, including any fee.
3. Message. The bank sends a SWIFT payment message identifying the beneficiary bank by its SWIFT/BIC code.
4. Correspondent banks. If the two banks have no direct relationship, the payment passes through one or more intermediary (correspondent) banks. Each step can add time and, in some cases, a deduction.
5. Credit. The beneficiary bank receives the instruction and funds, converts the currency if needed, and credits the recipient.

Domestic wires usually run on national systems instead. In the U.S., domestic interbank wires go through the Federal Reserve System. In the U.K., the term TT is commonly associated with CHAPS, the Clearing House Automated Payment System for high-value sterling payments.

Information needed to send a TT

To route the payment and confirm who is sending it, the bank needs:

• Sender: name, account number and identification. A business provides details about the company rather than an individual.
• Beneficiary: full name and address as held by their bank, and account number (an IBAN in countries that use it).
• Beneficiary bank: name, address and SWIFT/BIC code, plus a local routing or sort code where required.
• Payment details: amount, currency and, often, the purpose of the payment or an invoice reference.

A wrong digit can send the payment to the wrong place or cause it to be rejected and returned, sometimes after fees have already been taken.

What a TT costs

Pricing varies widely. The total cost can combine several parts:

• a fee charged by the sending bank;
• deductions by intermediary banks along the route;
• a fee for incoming wires at the receiving bank;
• the exchange-rate margin, if the bank converts the currency at a rate less favorable than the mid-market rate.

SWIFT messages carry a charge instruction that decides who pays: OUR (the sender pays all charges), SHA (shared: sender pays their bank, the recipient bears the rest) or BEN (the beneficiary pays all charges, deducted from the amount).

Example of a telegraphic transfer

Hypothetical figures for illustration only. A U.S. importer owes a supplier in Germany €10,000 and sends a TT under SHA charges. The importer’s bank charges a $40 sending fee and converts dollars to euros. An intermediary bank deducts €15, and the German bank charges €10 for the incoming wire. The supplier receives €9,975, not €10,000. If the invoice must be paid in full, the importer would choose OUR, paying the intermediary and receiving charges up front so that €10,000 arrives.

T/T in payment terms

In international trade, T/T describes both the payment method and the timing:

• 100% T/T in advance: the buyer wires the full amount before the goods are produced or shipped. This protects the seller and puts the risk on the buyer.
• 30/70 T/T: the buyer pays a 30% deposit by T/T (the “T/T as deposit”) when the order is placed and the remaining 70% later, commonly against shipment or a copy of the shipping documents. The exact trigger for the balance is whatever the contract says.
• T/T after delivery: the buyer pays once the goods arrive, which shifts risk to the seller.

Hypothetical example: on a $50,000 order under 30/70 terms, the buyer sends $15,000 by T/T at order and $35,000 when the agreed condition is met.

Telegraphic transfer vs. related payments

• Wire transfer: essentially the same thing. “TT” is more common in British, Asian and trade usage; “international wire” is common in the U.S.
• ACH transfer: a batch-processed U.S. domestic payment, generally cheaper and slower than a wire, and not used for most cross-border payments.
• Money transfer services: non-bank providers such as Western Union move money through their own networks. Strictly speaking, a TT takes place between banks.
• Digital payment apps: services like PayPal or digital wallets move money between accounts on one platform, which is a different mechanism from a bank-to-bank instruction.

Limitations of a telegraphic transfer

• Cost: layered fees and exchange margins can make TTs expensive for small amounts.
• Uncertain final amount: under SHA or BEN, the recipient may receive less than was sent.
• Speed varies: cut-off times, weekends, holidays, compliance checks and long correspondent chains can delay arrival beyond the typical window.
• Hard to reverse: once processed, a wire is difficult to recall, which makes TTs a common target in invoice and impersonation scams. Confirm new or changed bank details through a separate, trusted channel before sending.

FAQs

The Bottom Line

Telegraphic transfers matter to anyone paying a supplier abroad, settling trade invoices or sending large sums to a foreign bank account. Check every account and SWIFT/BIC detail, pick the charge option that fits the invoice, and confirm new or changed bank details through a separate, trusted channel before sending, since a processed wire is hard to recall.