If you’re a freelancer sending invoices to US clients or an exporter awaiting payments from European buyers, you’ve likely encountered the term telegraphic transfer. For many Indian businesses, international payments remain a maze of jargon, hidden fees, and unclear timelines. Every delayed payment creates cash flow gaps, while forex markups and bank charges chip away at hard-earned profits.
Telegraphic transfers form the backbone of global trade, enabling businesses to receive payments from anywhere in the world. While the technology has evolved from actual telegraph cables to digital SWIFT messages, banks still use this century-old term for cross-border transactions. The real challenge isn’t understanding what a TT is, but navigating the complex web of fees, exchange rates, and compliance requirements that come with it.
This guide breaks down the entire workflow of telegraphic transfers, from initiation to final credit. You’ll understand how banks process these payments, why exchange rates vary, and what those mysterious deductions are. Most importantly, you’ll learn how to minimise costs and maximise the funds that actually reach your account.
Key takeaways
- Telegraphic Transfer (TT) is the standard electronic method for large-value international payments, using the SWIFT network to adjust bank balances globally without physically moving funds.
- TT Buying Rate is the specific exchange rate applied to incoming foreign currency, often including a hidden bank margin that reduces the final credited amount.
- SWIFT fee codes — OUR (sender pays), BEN (beneficiary pays), and SHA (shared) — determine who bears transaction costs and directly impact net funds received.
- While secure and widely accepted, TTs are often slower (2–4 days) and more expensive due to correspondent bank fees and opaque exchange rates compared to modern fintech alternatives.
What is a Telegraphic Transfer (TT) and how is it defined?
Having established the importance of international payments for Indian businesses, let’s clarify what exactly a telegraphic transfer means. Despite its antiquated name, this payment method remains the global standard for cross-border transactions. Understanding its definition helps you communicate effectively with banks and clients about payment processes.
A telegraphic transfer (TT), also called telex transfer or T/T, is an electronic bank-to-bank funds transfer commonly used for cross-border payments. In modern practice, it denotes an international SWIFT/bank wire instruction transmitted between banks. The term originated when banks used telegraph networks to communicate payment instructions across continents.
- Historical context: Banks initially sent coded messages via telegraph cables to instruct foreign branches to pay specific amounts
- Modern evolution: Today’s TTs use the SWIFT network instead of telegraphs, but banks retained the terminology
- Primary usage: Reliable for large-value B2B payments, export proceeds, and personal remittances above ₹50,000
- Banking standard: Most Indian AD banks process international receipts as telegraphic transfers
Is a Telegraphic Transfer the same as a Wire Transfer?
Yes, for most practical purposes, the terms are used interchangeably. Wire transfer is the broader category encompassing all electronic funds transfers. Telegraphic transfer is a specific historical term that persists, particularly in Asia and the UK.
- TT specifically refers to international bank-to-bank transfers using SWIFT messaging
- Wire transfers can include both domestic and international electronic payments
- Indian banks often use “TT” in forex rate sheets and fee schedules
- Documentation like FIRCs may reference either term for the same transaction
What is the difference between TT and SWIFT?
Think of SWIFT as the postal service and TT as the letter being sent. SWIFT (Society for Worldwide Interbank Financial Telecommunication) is the secure messaging network banks use globally. TT is the actual service or financial product you purchase to move money internationally. When you request a telegraphic transfer, your bank uses SWIFT to communicate payment instructions to the recipient’s bank.
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How does the Telegraphic Transfer process work?
Now that we understand what a TT is, let’s examine the journey your money takes from sender to recipient. The process involves multiple banks and systems working together. Understanding each step helps you anticipate delays and identify where fees get deducted.
The role of the Correspondent Banking Network
Few banks maintain direct relationships with every financial institution globally. This limitation creates the need for intermediary banks that bridge the gap. Understanding this network explains why transfers take time and incur multiple fees.
- Correspondent banks act as middlemen when direct bank relationships don’t exist
- Each intermediary may deduct fees, reducing the final amount received
- Nostro accounts (our account with them) and Vostro accounts (their account with us) facilitate settlements
- More intermediaries mean higher costs and longer processing times
What is the Tele Transfer Credit process?
The final stage of receiving an international payment involves your bank identifying and crediting the incoming funds. This tele transfer credit process requires careful reconciliation. Banks must match SWIFT messages with actual fund movements before releasing money to your account.
- Receiving bank identifies incoming SWIFT MT103 message
- Compliance team verifies sender details and transaction purpose
- Bank applies its TT buying rate to convert foreign currency to INR
- Final credit appears in your account with a credit advice document
Did You Know?
Banks publish separate rates for different forex products. The “TT buying rate” converts incoming foreign currency to INR, while the “TT selling rate” applies to outward remittances.
How do you initiate a Telegraphic Transfer step-by-step?
Moving from theory to practice, accurate information gathering prevents failed transactions and rejection fees. International transfers require precise beneficiary details. Even minor errors can delay payments or incur additional charges. Preparation saves both time and money.
What information is required for a TT payment?
Senders need complete and accurate details before initiating any international transfer. Missing or incorrect information causes the majority of payment delays. Here’s what you’ll need to provide international clients or partners:
- Beneficiary name and address (must match bank records exactly)
- Beneficiary account number or IBAN (International Bank Account Number)
- Receiving bank’s name, address, and SWIFT/BIC code
- Purpose code for Indian regulations (export of services, advance payment, etc.)
- Your PAN number for amounts exceeding ₹50,000
How to execute the transfer via Online Banking or Branch?
Once all information is ready, the sender can proceed with initiating the transfer. Most banks offer online and branch options. Online banking typically offers better exchange rates and lower fees.
- Log into the corporate or retail internet banking portal
- Select ‘Foreign Outward Remittance’ or ‘International Transfer’
- Add the beneficiary and allow for the cooling period (if applicable)
- Enter the amount and select the currency (USD, EUR, GBP, etc.)
- Review the exchange rate and submit the request
What are the costs and fees associated with a Telegraphic Transfer?
Understanding the complete cost structure helps you make informed decisions about payment methods. Telegraphic transfers involve multiple fees that aren’t always transparent upfront. Banks often bundle charges within exchange rates, making true costs difficult to calculate. Let’s break down each component.
Who pays the transaction fees (OUR, BEN, SHA)?
SWIFT uses standardised codes to determine fee responsibility. These codes directly impact how much money reaches your account. Understanding them helps you negotiate payment terms with clients.
- OUR: Sender pays all fees (you receive the full invoiced amount)
- BEN: Beneficiary pays all fees (deducted from your payment)
- SHA: Shared costs (sender pays their bank, you pay receiving fees)
For business invoices, requesting OUR ensures you receive the complete payment amount.
What is the Telegraphic Transfer Buying Rate?
Exchange rates significantly impact your final receipts, often more than visible fees. The telegraphic transfer buying rate is the rate banks use when converting incoming foreign currency to INR. This rate includes the bank’s profit margin or spread.
- Banks set TT buying rates below market rates to earn on currency conversion
- Typical forex markups range from 1.0% to 3.5% of transaction value
- A ₹1,00,000 remittance might lose ₹1,500 to forex markup alone
- Published rates change multiple times daily based on market movements
Pro Tip: Compare your bank’s TT buying rate against mid-market rates on financial websites. The difference reveals the hidden forex markup you’re paying on every transaction.
How does Telegraphic Transfer compare to other payment methods?
With costs and processes understood, let’s evaluate how TTs stack up against alternatives. While telegraphic transfers remain standard for international trade, they’re not always the most efficient option. Modern payment methods offer different advantages depending on transaction size and urgency.
| Payment Method | Speed | Cost | Transparency | Best For |
| Telegraphic Transfer | 2-4 days | High (₹200-₹1,000 + forex) | Low | Large B2B payments |
| Demand Draft | 2-4 weeks | Medium | Low | Non-urgent transfers |
| Fintech Solutions | 1-2 days | Low-Medium | High | Regular business payments |
Telegraphic Transfer vs. Demand Drafts
Physical payment instruments are rapidly becoming obsolete in international trade. Understanding their limitations reinforces why electronic methods dominate modern business.
- Speed: TT completes in days; demand drafts take weeks
- Security: TT offers electronic tracking; physical drafts risk loss
- Convenience: TT requires no physical handling or courier costs
- Usage: Demand drafts now mainly serve specific regulatory requirements
Telegraphic Transfer vs. Modern Fintech Solutions
Digital payment platforms challenge traditional banking with transparent pricing and faster processing. These solutions particularly benefit businesses with regular international transactions.
- Exchange rates: Banks use fixed rates; fintechs often offer mid-market rates
- Infrastructure: Fintechs use local payment networks to bypass SWIFT fees
- User experience: Digital platforms provide real-time tracking and notifications
- Documentation: Automated compliance and instant FIRC generation
Razorpay International Payments vs. Traditional TT
Having explored various alternatives, Razorpay addresses specific pain points Indian exporters face with traditional TTs. The platform combines regulatory compliance with modern payment infrastructure. This approach reduces both costs and processing time for businesses.
- Accept payments via cards and alternative methods beyond just bank wires
- Automated FIRC generation eliminates manual bank requests
- Transparent pricing without hidden TT buying rate markups
- Seamless integration for e-commerce and B2B platforms
What are the pros and cons of using Telegraphic Transfers?
Before choosing your payment method, weigh the advantages against limitations carefully. Traditional telegraphic transfers offer reliability but come with legacy banking costs. Understanding these trade-offs helps you select the right solution for each transaction type.
Why do businesses still choose TT?
Despite newer alternatives, telegraphic transfers maintain their position in international trade. Certain advantages make them indispensable for specific scenarios.
- Universality: Almost every bank globally can receive TTs via SWIFT
- High limits: Suitable for multi-million dollar trade settlements
- Security: Highly regulated with complete transaction traceability
- Acceptance: Mandatory for certain regulatory and trade finance requirements
What are the limitations of TT?
Traditional banking infrastructure creates inherent disadvantages that impact modern businesses. These limitations become more apparent with smaller, frequent transactions.
- Cost: Receiving fees range from ₹200 to ₹1,000 per transaction
- Speed: Slower than domestic transfers due to correspondent banking
- Opacity: Limited visibility into intermediary deductions and delays
- Complexity: Multiple forms and compliance requirements for each transfer
How Razorpay International Payments Simplifies Global Trade
Understanding both traditional and modern payment methods, let’s examine how Razorpay specifically addresses Indian exporters’ challenges. The platform combines compliance automation with transparent pricing. This integrated approach solves multiple pain points simultaneously.
Automated Compliance: Razorpay solves the complex documentation headache by providing an automated Digital FIRC (Foreign Inward Remittance Certificate) for every transaction. This eliminates manual bank requests that typically take weeks. Exporters can download FIRCs instantly for GST claims and income tax filings.
Transparent Pricing: Unlike traditional banks that hide costs in the telegraphic transfer buying rate, Razorpay offers transparent pricing without forex markups. Businesses see exact fees upfront and retain more revenue. Real-time exchange rates ensure fair currency conversion.
Local Account Collections: The MoneySaver Export Account allows businesses to accept payments via local bank transfer networks. This includes ACH in the USA and SEPA in Europe. By bypassing expensive SWIFT intermediary fees, businesses save on every transaction.
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Conclusion
Telegraphic transfers remain the backbone of international trade, enabling Indian businesses to receive payments globally. Understanding the mechanics, from SWIFT messaging to TT buying rates, helps you anticipate costs and delays.
For large B2B transactions requiring bank guarantees or trade finance, telegraphic transfers provide unmatched reliability. However, modern platforms offer compelling alternatives for regular business payments. Evaluate your specific needs, transaction volumes, and cost sensitivity before choosing your international payment method.
FAQs
1. Are telegraphic transfers the same as wire transfers?
Yes, for most practical purposes, the terms are used interchangeably. Wire transfer is the broader category for electronic funds transfers, while Telegraphic Transfer (TT) is a specific historical term that persists, particularly in Asia and the UK, to describe international bank-to-bank payments.
2. How does a telegraphic transfer differ from SWIFT?
A Telegraphic Transfer is the actual service or financial product you purchase to send money, whereas SWIFT is the secure messaging network banks use to communicate and execute that transfer. Think of the TT as the letter and SWIFT as the postal service delivering it.
3. How long does a telegraphic transfer take to process?
A standard telegraphic transfer typically takes between 1 to 5 business days to complete. The exact timing depends on the number of intermediary banks involved, time zone differences, and the specific currencies being exchanged.
4. What is the Telegraphic Transfer Buying Rate?
The Telegraphic Transfer Buying Rate is the exchange rate a bank uses when it buys foreign currency from you, such as when you receive an international payment. This rate is typically lower than the interbank market rate because it includes a profit margin or spread for the bank.
5. What do the fee codes OUR, BEN, and SHA mean?
These codes dictate who pays the transaction fees: OUR means the sender pays all fees so the recipient gets the full amount; BEN means the beneficiary pays all fees (deducted from the principal); and SHA means the costs are shared between both parties.
6. Are telegraphic transfers secure for large transactions?
Yes, telegraphic transfers are highly secure because they utilise the regulated SWIFT network, which ensures every transaction is encrypted, traceable, and verified by banking institutions. This makes them the preferred method for high-value B2B trade settlements.
7. How does a telegraphic transfer differ from a demand draft?
A telegraphic transfer is a digital process that moves funds in days, whereas a demand draft is a physical paper instrument that must be mailed and deposited, often taking weeks to clear. Consequently, demand drafts are largely obsolete for urgent business transactions.
