TT payment vs Wire Transfer (SWIFT): What's the difference?

4 minute read

There are plenty of reasons you might want to make a payment electronically - maybe you want to make a remittance home to support a friend or family member, you need to pay an international invoice for a supplier for your business, or you simply want to make a TT bank payment to move your own money from one account to another. If you’re new to the world of Telegraphic Transfer (TT) payments, the language used can seem quite confusing.

Don’t worry - we are here to help. If you’ve been asked to make a telegraphic transfer, T/T payment or telex transfer, but your bank only offers something described as a wire transfer, there’s no need to panic. Here’s all you need to know about the different terminology used.

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Now, back to what you came here to read.

How do can you differentiate between an international wire transfer (SWIFT) and a telegraphic transfer?

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.

When banks first started to be asked to move money from one account to another, without a physical process of handing over banknotes or coins, they did this via a telegraphed message.1 An operator in your home bank would have used Morse code, to send a message to the recipient bank, to make the transfer happen - hence, the name ‘telegraphic transfer’, and the term ‘wired funds’ started to be used.4

Over time, and with the introduction of computers, this moved to a system where the same message, instead of being tapped out in Morse code, would be sent via the internet - although the older terms of telegraphic transfers and wired funds never really went away.

As more people were moving more money, banks realised that they needed a globally recognised system to make sure all transfers ended up in the right place. In 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT), was founded. SWIFT is the network which sits behind thousands of banks, making millions of international money transfers every day. It offers a standardised, global way of safely sending money around the world - although this service comes with a fee, payable by customers using the system in the form of charges added by the sending bank, and often intermediary banks who work together to move money to the right recipient.

These days, the term telegraphic transfer is used as a broad description for many different methods of moving money between accounts. These payments may be local or involve moving money across borders.

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.

Differentiating wire transfers vs EFT payments

EFT stands for electronic funds transfer. It’s an umbrella term covering any sort of electronic transfer of money, from one account to another, which is done via a computer.3 This could be a transfer of funds between two different accounts within one bank, or moving money between banks - and even between banks in different countries.3

Wire transfers - which are described in our brief history lesson above - are one form of EFT payment. Other types of EFT payments include any payments made by credit or debit card, direct debits arranged via your bank, or bill payments completed using your online banking service, for example.3 So there you go - chances are you’ve used EFT payments multiple times before, but didn’t even know it.

Want more info on telegraphic transfers?

Got a thirst for knowledge?

Here are some more great resources to help you learn about telegraphic transfers, including what they’ll cost you, and how to reduce the fees you pay for moving your money.

It can feel like you need read a dictionary before you can successfully move your money from one account to another, send some cash to a family member overseas, or pay a supplier electronically. The language can feel confusing at first, largely because of the way the processes and systems used have evolved over time. Get to grips with the phrases, though, and it’s not all that tricky to understand. Good luck!

  1. (March 17, 2018)

  2. (March 17, 2018)

  3. (March 17, 2018)

  4. (March 17, 2018)

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