What is a Telegraphic Transfer?

Revolut Contributor

 · 03/10/2020  · 03/10/2020

The term “Telegraphic Transfer” is widely used around the world to refer to an electronic method of transferring funds between bank accounts. The name is a little old fashioned now, as it dates back to when banks would send instructions for money to be transferred via the telegraph – in Morse code!

So, what is a Telegraphic Transfer today, and how does it work? Banks now use the internet to communicate regarding transactions and transfer funds between accounts. In the UK, a Telegraphic Transfer can refer to domestic transfers using CHAPS or international transfers using the SWIFT system.

CHAPS Transfers

CHAPS stands for Clearing House Automated Payment System. It’s used for same-day transfers of funds between UK accounts, typically for high-value or time-critical transactions. Note that the term “Telegraphic Transfer” doesn’t apply to the other most common method of bank transfer in the UK: the BACS payment. This is a common misconception.

SWIFT Transfers

SWIFT stands for Society for Worldwide Interbank Financial Telecommunication. This is a system that was set up in 1973 to regulate international financial transactions, in order for common processes and standards to be followed across the board.

A Telegraphic Transfer via SWIFT allows you to send funds wherever you want in the world. However, for payments within Europe you could also choose the quicker and cheaper SEPA transfer (like a BACS payment, this doesn’t technically fall under the umbrella of Telegraphic Transfer).

What is the cost of a Telegraphic Transfer?

For a domestic Telegraphic Transfer via CHAPS, your bank will usually charge you between £25 and £35 per transaction.

In contrast, the Telegraphic Transfer fee for SWIFT transfers can vary widely. Essentially, with a SWIFT payment your funds can pass through several different banks on its way to its destination, and each bank that handles the funds may charge a further fee.

Say you want to make a Telegraphic Transfer to your friend in Australia... If your bank and your friend’s Australian bank are in a direct relationship, they can arrange the transfer between them without needing an intermediary. In this case, the fees will be minimal: perhaps a fee from your bank, plus potential mark-up on the exchange rate, and your friend’s bank might charge them something too.

However, if your friend has an account with an Australian bank with which your bank has no direct relationship, your bank will first send the funds to their correspondent bank in Australia, who will then send them to your friend’s bank. This means you will face the fees above, with a further fee from the correspondent bank to cover handling the money.

You may choose to pay the fees yourself or deduct them from the amount your friend receives.

How long does a Telegraphic Transfer take?

As with the fees, the Telegraphic Transfer processing time will be different depending on whether it is a CHAPS or SWIFT transfer.

A CHAPS payment is very quick – the money can be transferred instantly or take up to 2 hours. That’s why it’s used for domestic transactions that are time sensitive.

Because a SWIFT transfer is more complicated and may have to pass through multiple banks, as discussed above, a Telegraphic Transfer via this route usually takes 2–4 days.

How do I send money through Telegraphic Transfer?

It’s simple to make an online Telegraphic Transfer. You will need:

  • Your bank account details
  • The recipient’s details: Their name, address, and contact information, the name of their bank, and their bank account number. You may also need an IBAN or SWIFT code.

Once you’ve got all this information to hand, it should just be a matter of filling out your bank’s online form and the transfer process will get underway.

Key Takeaways

For high-value domestic payments or transferring funds outside Europe, a Telegraphic Transfer is a secure and dependable option for moving your money. But for smaller transactions or transfers within Europe, cheaper options than a Telegraphic Transfer are available.

If you’re in doubt, make sure to check with your bank before making the payment.

For more information on how money transfers work, check out these other Revolut blog posts: