#Opinion and Analysis: TechBanking- A Closer Look Into Telegraphic Transfers vs Wired Transfers

The technological evolution does not just signifies the dynamic artistry being shown cellphone handset makers such as Apple, Samsung, Huawei and company but is also tells a remarkable story on how technology has redefined the banking sector.

Banks have moved from conventional financial institutions trading from designated brick and mortar banking halls to the modern day financial service institutions which are mobile and efficient when processing both local and international payments for their clients.

By Cisco Eng. Shingie Lev Muringi  

So today, we are going to looking into Telegraphic Transfers and Wired Transfers as the latest banking technologies being used by every financial institution today. Here in Zimbabwe, all our locals banks such as Steward Bank, CBZ, CABS, POSB, Standard Chartered, Stanbic, MBCA, FBC, and Barclays are interlinked together on a well regulated platform which allows interbank transfers.

So what is a Wire Transfer?

One of the fastest ways to send money is via wire transfer. Although a wire transfer can take days, in most cases a wire transfer takes place within in minutes. It is a direct bank to bank transaction that allows you to move money from your account directly into the account of someone else. This is because there is an agreement set up between the banks, allowing for this transfer to take place.

Telegraphic Bank Transfer

Telegraphic Bank Transfer Form

Wire transfer also does not have to take place from bank account to bank account. Western Union and MoneyGram are companies that make use of wire transfer with its funds. When you go to a Western Union or MoneyGram provider, you can accomplish a cash wire transfer. You take the money to the approved Western Union or MoneyGram counter, pay the fee, and then the person on your end verifies it with the person on the receiving end. A Western Union or MoneyGram wire transfer can take as little as 10 minutes if everything goes well.

Financial institutions often charge fees for receiving wire transfers as well. Because a little more effort has to be made when receiving, since the institution is contacted directly, many banks and credit unions will charge a fee to receive transfers. However, the fee to receive a transfer is often less than the fee to send a transfer. Wire transfer fees vary according to financial institution, but many charge between $20 and $35 to send a wire transfer, and between $10 and $20 to receive one.

A closer look into Telegraphic Transfers – TTs

A telegraphic Transfer (TT) is an electronic method of transferring funds; it is utilized primarily for overseas wire transactions. These transfers are used most commonly in reference to CHAPS (Clearing House Automated Payment System) transfers in the U.K. banking system and the same applies in Zimbabwe as regulated by the Reserve Bank of Zimbabwe.

Telegraphic Transfers are also known as Telex Transfers, abbreviated TT; TTs can also refer to other types of transfers. If you are to make a TT to an overseas account, then it is the duty of the Reserve Bank to monitor such transactions once your bank has send the request. Remember the RBZ closely vet such transactions to guard against money externalization and other fraudulent activities which disadvantages the national treasury.

Telegraphic Transfers are usually fairly expensive due to the fast nature of the transaction. Generally, the Telegraphic Transfer is complete within two to four business days depending on the origin and destination of the transfer, as well as any currency exchange requirements.

The cost associated with a Telegraphic Transfer can also be affected by these variables. Additional factors affecting the cost can include, but are not limited to, the amount being transferred and the institution chosen to complete the transaction. Associated fees to complete the transfer are not standardized across all institutions and therefore can vary dramatically from one institution to the next.

Required Information

To complete the transfer, certain information regarding the sender and destination are required. Whether a person transfers funds between two accounts that are both held in his name, or between two accounts held by two different individuals, the most pertinent information required for the transfer are the account numbers and information regarding the corresponding financial institutions. Personally identifiable information is also required for security purposes and to confirm the identity of the sender. Similar requirements are required between business entities, but the identifiable information relates to the business instead of the individual.

Transfer Mechanism

Originally, as the name suggests, telegraphs were used to communicate the transfer between financial institutions. While the telegraph has become obsolete, as of 2016, the Telegraphic Transfer concept has evolved with changing technologies and uses secure cable networks to transfer funds. At times, the transfer mechanism may be referred to by the more general term, wire transfer, or by the more updated term, electronic funds transfer (ETF).



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