Difference between ‘Telegraphic Transfer’ and ‘Swift’ – This is another common question among traders about swift and TT (Telegraphic Transfer). What is the meaning of Telegraphic Transfer, How does swift work? Whether swift and TT are same?
What is swift and what is TT?
However, in order to differentiate, let explain once again:
What is Swift ?
Society for Worldwide Interbank Financial Telecommunication is abbreviated as SWIFT. SWIFT extends service of network which enables banks and other financial organizations all over world to send and receive financial transaction information in a standardized, secured and reliable environment. SWIFT does not facilitate funds transfer; but SWIFT sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. SWIFT CODES means bank identification codes allotted to each bank all over world. SWIFT has been introduced after popular TELEX system service which had been used before 1990s.
The service of Telex is too slow and had no standardized format for the data it transfers, added up to an inefficient system apart from its insecurity. In order to solve the demerits of Telex services seven major international banks gathered together to discuss a suitable replacement of telex in the year 1974. After three years, in 1977, a society was formed and 230 member banks from 5 countries started operation of SWIFT. SWIFT has now more than 10000 members worldwide (more than 200 countries) handles more than 15 million messages daily. Any financial institution who holds a banking license can become a member of SWIFT by paying a joining fee and service charge for each message sent.
How does TT (Telegraphic Transfer) work?
What is a Telegraphic Transfer TT?
Telegraphic Transfer is a mode of transfer of funds electronically before the year 1990s.
TT, Telegraphic Transfer of money was effected by a cable message service from one bank to another to transfer money. Before introduction of Telegraphic Transfer, money had been transferred directly between banks via a Telex message sending directly from one bank to another. TT payment was very popular prior to existence of electronic payment networks. Telegraphic transfer is operated by cable message and TT is treated one of the other electronic fund transfers.