Banks still print “telex charges” on statements, confusing businesses that expect modern terminology for their international payments. These charges represent the cumulative fees for sending money through the global SWIFT network, though the actual telex machines disappeared decades ago. The real challenge lies in predicting total costs when intermediary banks deduct hidden fees en route.
Businesses sending telex payment, telegraphic transfer, and telex copy instructions face unpredictable deductions ranging from ₹500 to ₹15,000 per transaction. Multiple banks touch each payment, each potentially claiming its share. This guide demystifies these fee structures, helping you calculate true transfer costs before initiating payments.
Key takeaways
- Telex Transfer: “Telex Transfer” is simply outdated terminology for modern SWIFT network payments, which are the secure messaging instructions used to move funds globally.
- Total Cost: The total cost of a transfer is rarely just the upfront fee; it typically includes hidden intermediary deductions (₹500-₹3,000) and exchange rate markups (1-3.5%).
- Fee Code Choice: Selecting the correct fee code—OUR (Sender pays), SHA (Shared), or BEN (Beneficiary pays)—is critical for ensuring vendors receive the exact invoice amount.
- Modern Alternative: Modern fintech solutions like Razorpay can often bypass the expensive SWIFT network entirely using local rails, offering transparent pricing and automated compliance tools.
What is the Relationship Between Telex and SWIFT?
“Telex Transfer” persists as banking terminology despite the technology becoming obsolete when SWIFT launched in the 1970s. Banks replaced physical telex machines with the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, enabling secure digital messaging between financial institutions.
Today’s telegraphic transfer uses SWIFT’s encrypted messaging infrastructure to send payment instructions globally. While the underlying technology changed completely, bank contracts and fee schedules retain the legacy “telex” terminology.
Key terminology differences:
- Telex: The original electromechanical system using telegraph lines (defunct)
- SWIFT: Current secure messaging network processing 150+ million messages daily
- Telegraphic Transfer (TT): The service name banks use for wire transfers
- MT103: The actual SWIFT message format containing payment details
What are the Different Types of Telex-SWIFT Charges?
Understanding SWIFT’s four-layer fee structure prevents payment surprises. Each international wire transfer attracts multiple charges beyond your bank’s quoted outward remittance fee.
| Fee Type | Typical Cost (INR) | Typical Cost (USD) | Who Charges |
| Sending Bank Fee | ₹500-₹15,000[2] | $10-$50 | Your AD bank |
| SWIFT Message Fee | ₹200-₹1,000[3] | $5-$15 | Sending bank |
| Intermediary Fees | ₹500-₹3,000[3] | $10-$50 | Correspondent banks |
| Recipient Bank Fee | Variable | $0-$30 | Beneficiary’s bank |
How Does Sending Bank Fees Work?
Indian Authorised Dealer (AD) banks charge outward remittance commissions ranging from ₹500 for small transfers to ₹15,000 for larger corporate payments. These fees cover processing, compliance checks, and SWIFT message transmission.
Typical sending bank charges:
- HDFC Bank: ₹500-₹1,000 plus GST for retail transfers
- Central Bank of India: 0.10% (min ₹500, max ₹15,000) plus SWIFT charges
- Corporate accounts: Negotiated rates, often percentage-based
- Additional GST: 18% on all commission portions
Why Do Intermediary Bank Fees Occur?
Banks lacking direct relationships route payments through correspondent banks, creating a chain where each intermediary deducts fees. A payment from India to a small US bank might pass through 2-3 intermediaries, each claiming ₹500-₹3,000.
Common intermediary scenarios:
- Major corridor (India-US via large banks): 1 intermediary typical
- Exotic routes (India-Africa): Up to 3 intermediaries possible
- Each intermediary: Deducts $10-$50 unless sender chooses OUR option
What are Recipient Bank Charges?
Beneficiary banks may charge inward remittance fees, particularly in countries with complex banking regulations. These charges vary significantly by institution and country, making vendor communication essential.
US banks typically charge $0-$15 for incoming wires, while European banks might charge €10-€30. Indian banks receiving foreign currency often charge ₹200-₹1,000 for processing and conversion.
How do Exchange Rate Markups Impact the Total Cost?
Banks apply forex spreads ranging from 1% to 3.5% above mid-market rates. On a $10,000 transfer at ₹83 per dollar, a 2% markup costs ₹16,600 extra, often exceeding all other fees combined.
Did You Know?
Banks’ forex markups often represent 60-70% of total transfer costs, yet they’re rarely disclosed transparently in fee schedules.
How Do OUR, SHA, and BEN Codes affect Transfer Costs?
Fee allocation codes determine who bears the telegraphic transfer charges throughout the payment journey. Selecting the wrong code causes vendor short-payments and reconciliation headaches.
| Fee Code | Sender Pays | Recipient Receives | Best Use Case |
| OUR | All fees | Full invoice amount | Vendor payments |
| SHA | Only sending fees | Amount minus intermediary fees | Internal transfers |
| BEN | Initial amount only | Amount minus all fees | Recipient-agreed |
When Should You Use the OUR Code?
Use OUR for exact invoice settlements where vendors must receive specific amounts. This ensures your $5,000 invoice payment arrives as exactly $5,000, with you bearing all intermediary charges upfront.
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What are the Implications of the SHA Code?
SHA remains the default for most transfers, splitting costs between sender and recipient. While economical, it often leads to short-payments when intermediary banks deduct unexpected fees from the principal amount.
When is the BEN Code Appropriate?
Select BEN when recipients explicitly agree to bear all charges, such as investment redemptions or certain refund scenarios. The recipient receives the original amount minus all accumulated fees.
What Factors Determine the Total Cost of Telegraphic Transfers?
Beyond fee codes, multiple variables influence your total telex payment, telegraphic transfer, telex copy costs. Understanding these factors helps optimise payment strategies.
Cost-determining factors include:
- Currency Corridor Complexity: USD/EUR routes cost less than exotic currency pairs.
- Transfer Urgency: Express processing adds ₹500-₹2,000 to standard fees.
- Banking Relationship Tier: Premium accounts have access to reduced fees and better forex rates.
- Compliance Requirements: Enhanced due diligence triggers additional processing charges.
- Transfer Amount: Higher values attract percentage-based fees versus flat rates.
When Should You Request a Telex Copy of Your Payment?
A telex copy provides the MT103 SWIFT message proving your payment instructions reached the banking network. This document becomes crucial when vendors claim non-receipt or when tracking delayed payments through correspondent banks.
Banks generate MT103 documents containing unique transaction references (UETR), sender/receiver bank codes (BIC), value dates, and fee details. Request this through your relationship manager or online banking portal, typically for ₹200-₹500[3].
Essential MT103 fields to verify:
- UETR reference: Unique tracking number for SWIFT investigations
- Field 71A: Fee code (OUR/SHA/BEN) confirmation
- Field 32A: Value date and currency amount
- Field 52-59: Intermediary bank routing details
Pro Tip: Always request MT103 copies for payments above ₹5,00,000. Screenshot the document immediately as some banks remove access after 30 days.
How Can Businesses Minimise International Transfer Costs?
Reducing transfer costs requires strategic planning beyond simply comparing bank fees. Smart businesses combine multiple optimisation techniques to save 30-50% on international payments.
What are the Advantages of Negotiating Bank Spreads?
Banks maintain significant flexibility on forex markups for corporate clients. Benchmarking your bank’s offered rate against xe.com or Reuters before confirming transfers reveals potential savings. Volume commitments unlock preferential rates.
Negotiation Strategies:
- Request rate cards showing tiered forex pricing by volume
- Compare live mid-market rates before accepting bank quotes
- Consider forward contracts to lock favourable rates for 3-6 months
How Does Razorpay International Payments Make the Process Easier?
Razorpay International Payments eliminates traditional SWIFT complexity through transparent pricing and automated compliance. The platform provides real-time exchange rates without hidden markups, while handling FIRC generation automatically.
Key benefits:
- Local payment rails bypass SWIFT fees for supported corridors
- Digital FIRC generation replaces manual bank follow-ups
- Dashboard visibility eliminates the need for telex copy requests
- Zero forex markup policy saves 2-3% versus bank rates
How Razorpay Simplifies International Collections & Reduces SWIFT Costs
Razorpay’s MoneySaver Export Account uses local payment rails like ACH (US) and SEPA (Europe) to bypass expensive SWIFT networks. This eliminates recipient bank charges and intermediary deductions that typically reduce earnings by ₹1,000-₹5,000 per transaction.
Instead of chasing banks for telex copies or physical FIRC documents, Razorpay provides automated digital FIRC generation for every incoming payment. This ensures RBI compliance while saving 3-5 days of documentation delays.
Unlike traditional banks hiding costs in exchange rate markups, Razorpay offers transparent pricing. Businesses typically save 50% on transaction costs compared to standard bank wire transfers through eliminated intermediary fees and transparent forex rates.
Simplify International Collections with Razorpay
Get paid via ACH/SEPA, avoid SWIFT deductions, and receive instant
digital FIRC for faster, compliant export receipts.
Conclusion
Regular audits of bank statements reveal hidden intermediary deductions affecting your bottom line. Modern platforms like Razorpay provide transparency and automation that traditional telex payment, telegraphic transfer, and telex copy methods lack, reducing both costs and compliance burden for Indian exporters.
Digital payment gateways offer real-time tracking, automated reconciliation, and detailed reporting dashboards that empower finance teams to identify discrepancies quickly. Exporters benefit from faster settlement cycles, reduced manual intervention, and improved compliance with RBI guidelines.
By leveraging technology-driven solutions, businesses can minimise operational risks, enhance cash flow predictability, and strengthen trust with overseas partners. Ultimately, shifting from legacy telex systems to modern fintech platforms ensures efficiency, cost savings, and long-term sustainability in global trade operations.
FAQs
Q1. What is the difference between a Telex transfer and a SWIFT transfer?
“Telex transfer” is a legacy term often still used in banking contracts to refer to what is now a digital SWIFT transfer. While the terminology persists, the actual technology has been replaced by the secure SWIFT messaging network.
Q2. Who is responsible for paying intermediary bank fees?
Responsibility depends on the instruction code used: ‘OUR’ charges the sender, ‘BEN’ charges the recipient, and ‘SHA’ splits the costs, meaning intermediary fees are often deducted from the final amount received.
Q3. How much does a telegraphic transfer typically cost?
Total costs vary by bank but generally include a sending fee (₹500–₹15,000), intermediary fees (₹500–₹3,000 per bank), and a hidden exchange rate markup that can range from 1% to 3.5%.
Q4. What is a telex copy, and why do I need it?
A telex copy (often an MT103 document) is the official proof that payment instructions were sent. It is essential for tracking missing funds or proving to a vendor that a payment has been initiated.
Q5. Is it possible to avoid SWIFT charges on international transfers?
Yes, using modern fintech platforms like Razorpay often allows you to bypass the traditional SWIFT network by utilising local payment rails (like ACH or SEPA), significantly lowering or eliminating intermediary fees.
Q6. Which fee code should I use for vendor payments?
The ‘OUR’ code is generally recommended for vendor payments because the sender covers all fees, ensuring the vendor receives the exact invoice amount without deductions.
