The Complete Telegraphic Transfer Guide for Payment Operations Teams

Turn unpredictable international payment chaos into strategic operational control

Your €50,000 supplier payment to Germany should have been straightforward until you discovered it cost €237 in unexpected fees and arrived two days late, straining a crucial business relationship. If this scenario sounds familiar, you’re not alone.

Across Europe, payment operations teams face similar frustrations: suppliers complain about late payments, finance directors question unexpected fees and cash flow projections are derailed by unpredictable transfer times.

The challenge isn’t just individual transactions; it’s the lack of visibility into why telegraphic transfers behave so unpredictably.

This guide will break down how telegraphic transfers work, reveal hidden costs and help you determine when alternatives might work better for your business.

What Are Telegraphic Transfers (TT)?

A telegraphic transfer is a method of sending money electronically from one bank to another across international borders. When your business pays a German supplier £50,000 through your bank, the payment is processed as a telegraphic transfer.

TTs operate through sophisticated digital networks connecting financial institutions worldwide. Payment operations teams rely on TTs for essential international transactions: supplier settlements, cross-border payroll, significant business payments and regulatory-mandated transfers.

TTs provide the security, traceability and compliance documentation that international business requires. Each transfer generates a detailed audit trail through the banking system, featuring unique reference numbers and confirmation documentation that meets regulatory requirements across multiple jurisdictions.

Telegraphic transfers and wire transfers are essentially the same thing; the distinction is primarily a matter of regional terminology. UK and Asian banks typically use telegraphic transfers while US and European institutions prefer wire transfers.

Both operate through the same underlying infrastructure, predominantly the SWIFT network with identical processes, costs and timing considerations.

Why Businesses Use Telegraphic Transfers

Most businesses encounter telegraphic transfers through external mandates rather than actively selecting them. However, some companies deliberately choose TTs based on their operational needs and banking relationships.

If you’re in finance, gaming or international trade, you’re likely familiar with regulatory mandates that effectively force TT usage. Anti-money laundering frameworks require detailed audit trails which telegraphic transfers provide through correspondent banking documentation and SWIFT message tracking.

When regulators require transparency and traceability, alternative payment methods simply can’t match what TTs deliver across multiple jurisdictions.

Your suppliers often dictate payment methods, not the other way around. International suppliers frequently specify TT payments in contracts, especially for high-value transactions or when operating in markets with limited banking infrastructure.

Large suppliers trust TTs because settlement is guaranteed once banking instructions are confirmed, turning their preference into your contractual obligation. Some suppliers even receive better banking terms for TT receipts, providing them with financial incentives to insist on telegraphic transfers, regardless of the alternatives that may exist.

How Do Telegraphic Transfers Work?

Understanding how telegraphic transfers work involves examining the underlying infrastructure that connects banks worldwide. The SWIFT network, correspondent banking relationships and settlement systems collaborate to facilitate the transfer of money across borders.

These interconnected systems explain why TTs follow specific processes and why certain limitations exist in international wire transfers.

Banks Transmit Payment Instructions

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides the messaging network that banks use to communicate payment instructions. When you send a TT, your bank creates a SWIFT message containing payment details, recipient information and routing instructions.

The most common message type is MT103 which includes your payment information and travels through the network to reach the recipient’s bank. SWIFT doesn’t handle actual money transfers – it only carries payment instructions.

Banks use these messages to coordinate fund movements through their own account relationships and settlement networks.

Payments Route Through Correspondent Banks

Banks cannot maintain direct connections with every institution worldwide, so they rely on correspondent banking relationships to reach international destinations. Your bank maintains accounts (called nostro accounts) with correspondent banks in different countries and currencies.

Without direct relationships to recipient banks, your payment routes through correspondent banks that do have those connections. Each correspondent bank in the chain maintains its account relationships and charges fees for processing payments through its network.

This explains why intermediary fees can appear unexpectedly and why processing times vary depending on the number of correspondent banks involved in handling your transfer.

Settlement Systems Execute Fund Movement

Actual money movement happens through settlement networks that connect banks within specific regions or currency zones. TARGET2 handles EUR settlements in Europe while CHIPS processes USD transfers in the United States.

Real-time gross settlement (RTGS) networks process high-value transfers individually and immediately. Batch processing networks accumulate smaller transfers and process them at scheduled intervals throughout the day.

Settlement timing depends on which networks your transfer uses and their operating hours with some operating continuously while others follow business day schedules.

Cut-off Times Determine Processing Speed

Banks establish daily cut-off times for TT processing, based on their operational requirements and the schedules of their downstream settlement networks. Transfers submitted after the cut-off time will be processed on the next business day.

Currencies and destinations have varying cut-off times with USD transfers often having earlier cut-offs due to US banking hours.

Weekend and holiday processing varies by bank and currency with some networks offering limited weekend processing while others suspend operations entirely.

Complex routing through multiple correspondent banks across different time zones creates additional timing considerations. Each bank in the chain applies its cut-off times and processing schedules.

The Five-Stage Telegraphic Transfer (TT) Process

When you send a telegraphic transfer, your payment goes through five distinct stages before reaching its destination.

Stage 1: Payment Initiation and Documentation

• Your finance team provides your bank with the recipient’s name, account number or IBAN, beneficiary bank details, SWIFT/BIC code, payment amount and reason for transfer.
• Documentation requirements depend on destination and transfer amount—larger payments typically require invoices, contracts or other supporting documents.
• Your bank checks the account balance and screens payments against anti-money laundering databases and sanctions lists.
• Additional paperwork may be requested if the recipient details don’t meet compliance standards or trigger due diligence procedures.

Stage 2: Bank Verification and Compliance Checks

• Your bank verifies both your details and the recipient’s information against internal databases and regulatory watchlists.
• Know Your Customer checks ensure recipient information matches banking records and meets regulatory standards.
• Currency conversion rates are calculated at this stage, though final rates may change during processing.
• Payment cannot proceed until compliance approval is received—this may take hours or extend overnight for manual reviews.

Stage 3: SWIFT Network Routing

• Payment instructions travel through the SWIFT network to reach the recipient’s bank.
• Direct bank relationships make the process straightforward; however, smaller banks often require the services of intermediary banks for routing.
• Each correspondent bank follows its processing timeline and may charge fees not included in the original estimates.
• Banks authenticate payment instructions and verify authorisation through SWIFT security protocols at each step.
• Payments to countries with fewer international banking connections may require multiple correspondent banks which can complicate the routing process.

Stage 4: Currency Conversion and Settlement

• Currency conversion occurs using banks’ exchange rates rather than market rates, creating additional costs.
• Money moves through banking networks via settlement systems connecting financial institutions.
• The process typically takes one to three business days, depending on currencies and countries involved.
• Correspondent banks deduct their fees during this stage, often without providing upfront disclosure, thereby reducing the final amounts.

Stage 5: Confirmation and Reconciliation

• Transaction confirmations with reference numbers (MT103 forms) serve as proof of payment and tracking tools.
• Both sender and recipient receive confirmation documentation with varying levels of detail and timing.
• Final settlement notifications include deducted fees, applied exchange rates and net amounts received.
• Finance teams must reconcile confirmation details with original payment instructions, accounting for fee deductions and exchange rate differences.
• All documentation must be retained for audit trails and regulatory compliance, especially for multi-country operations.

Information Required for Telegraphic Transfers

Getting your telegraphic transfer details right the first time prevents costly delays and additional fees. Each piece of information serves a specific purpose in routing your payment correctly and meeting regulatory requirements.

Full Legal Name

• Purpose: Banks match names precisely; variations cause compliance holds
• Required: Must exactly match the bank account registration
• Best practice: Verify the legal entity name with the supplier before submitting the transfer

Complete Address

• Purpose: Required for anti-money laundering compliance
• Required: Include postcode and country
• Best practice: Request the address in English characters to avoid encoding issues

Phone Number (For Certain Jurisdictions)

• Purpose: Compliance verification in regulated countries
• Required: Include country code (+49 30 12345678)
• Best practice: Confirm phone number format requirements with your bank

Bank name and Full Address

• Purpose: Identifies the receiving institution for correspondent routing
• Required: Include full branch details and address
• Best practice: Use complete official bank names, not abbreviations

SWIFT/BIC code

• Purpose: Routes payment through the SWIFT network
• Required: 8 or 11-character code (DEUTDEFF or DEUTDEFFXXX)
• Best practice: Verify SWIFT codes using your bank’s lookup system

Account Number or IBAN

• Purpose: Identifies the specific account for crediting funds
• Required: Full account number or properly formatted IBAN
• Best practice: Use IBAN validation tools before submitting a transfer

Sort Code or Routing Number (UK/US specific)

• Purpose: Domestic routing within the destination country
• UK format: 12-34-56
• US format: 123456789

Transfer Amount and Currency

• Purpose: Determines settlement networks and compliance thresholds
• Required: Exact amount with currency specification (50,000.00 GBP)
• Best practice: Specify precise amounts to avoid rounding discrepancies

Purpose of Payment

• Purpose: Regulatory compliance and audit requirements
• Required: Specific transaction description with reference numbers
• Best practice: Include invoice numbers or contract references for clarity

Fee Arrangement (OUR, BEN or SHA)

• OUR: You pay all fees (recommended for supplier payments)
• BEN: The Recipient pays all fees (reduces the amount they receive)
• SHA: Fees split between parties (most unpredictable)

Urgency Requirements

• Standard: 1-3 business days
• Priority: Same/next day (additional £15-£50 fee)

Are Telegraphic Transfers Still the Right Fit for Your Business?

Most finance teams find themselves questioning whether their current international payment methods match their business needs. Understanding when TTs serve your operations well versus when they create constraints helps you make informed decisions about payment methods.

The key is assessing whether TT limitations are becoming operational problems that affect your business performance.

When Telegraphic Transfers Still Make Operational Sense

• Infrequent, High-Value Transactions: TTs remain cost-effective when you send large sums occasionally. Flat fees have minimal impact when spread across substantial payment amounts and regulations often mandate compliance documentation at that scale anyway.
• Regulatory-Mandated Transfers: Industries such as financial services, regulated gaming or cross-border trade may require SWIFT traceability and specific bank-to-bank documentation that alternative payment methods can’t provide.
• Low Integration Demands: Companies that do not rely on ERP automation or recurring multi-party payments can manage manual TT processes without incurring significant penalties. Simple payment workflows often make TT’s administrative requirements manageable.
• Stable Vendor Relationships: Long-term suppliers or partners in jurisdictions where TTs are standard may expect or contractually require this payment method. Regional banking limitations make alternatives impractical in specific markets.

When TTs Start Creating Operational Constraints

• Recurring, low-to-mid value payments: Frequent smaller transactions cause TT fees to accumulate into disproportionately large expenses. Multiple monthly payments make it difficult to justify TT costs against faster, cheaper alternatives.
• Cash flow sensitivity: Multi-day settlement and unpredictable cut-offs complicate working capital planning. Tight vendor payment terms or variable cash flow requirements often create operational stress.
• Multi-party payment models: Platforms managing payouts to multiple vendors, marketplaces or payroll systems discover that TT methods can’t handle split settlements and real-time payment logic required for their business models.
• Real-time visibility requirements: Finance operations that require API-based tracking, instant confirmation or integration with internal dashboards often find SWIFT-based updates and MT103 forms inadequate for their operational needs.
• International expansion needs: Companies expanding into multiple new markets simultaneously need fast setup, consistent service levels and local payment methods. Traditional wire transfer methods struggle to provide these capabilities across diverse markets.
• High-volume payment operations: Organisations that process dozens or hundreds of international payments monthly often find that manual TT reconciliation processes become time-consuming and error-prone as transaction volumes increase.

Alternatives to Telegraphic Transfers

Telegraphic transfers aren’t your only option for international payments. Depending on your transaction volume, destination countries and operational requirements, these alternatives might provide better value and efficiency.

Payment Solutions For Every Business

When TT limitations constrain your international payment operations, modern payment infrastructure offers alternatives designed for business growth.

Rapyd provides unified global capabilities that eliminate the complexity of managing multiple banking relationships while supporting the payment methods your customers and vendors prefer.

Businesses require a payment partner that understands the challenges of international expansion and provides the technical infrastructure to manage complex transactions while maintaining operational simplicity.

Whether you need to send payments to one country or worldwide, Rapyd’s platform makes it simple.