Methods of Money: Transfer TT-Wire Transfer-Cash

171 Views
Methods of Money: Transfer TT-Wire Transfer-Cash


The advanced forms of money transfer have been favoring Business-2-Business deals incredibly. With the help of electronic funds transfers; buyers can pay their suppliers from any part of the world. This has been a bliss for business owners, saving them time, effort, and costs.

On our platform, suppliers offer different methods of payment. The main ones are Telegraphic Transfers, Wire Transfers, and Cash. TT and Wire Transfers facilitate international money transfers. On the other hand, cash is sometimes a preferred payment method for small amounts.

To succeed in an online business, it is best to understand all of its aspects. If you are curious about how an electronic money transfer work, keep reading. This article will explain Telegraphic Transfers and Wire Transfers simply. It will also provide recommendations regarding cash payments.

Contents:

What is a wire transfer and How fast is it?

Types of wire transfers.

How do wire transfers work?

Information required for a wire transfer.

What is SWIFT?

What is a Telegraphic Transfer?

How do TTs differ from International Wire Transfers?

What are the fees of a money transfer?

How is the money transfer fee calculated?

Is there an exception for money transfer fees?

Perks of paying with telegraphic transfers.

What to consider when paying suppliers with cash?

 

What is a wire transfer and how fast is it? 

A wire transfer can be a general term for the process of transferring money electronically. It allows sending an amount of money from one party to the other without having “tangible” cash involved. The process is held between two parties; requiring a sender and a receiver. These parties can be banks or other financial institutions (like the Western Union.)

Wire transfers are generally a fast method of payment. Depending on their type, this type of money transfer may take about 2 hours to 4 days.

Types of wire transfers:

Domestic:

The process of transferring money between two parties that are located in the same country. These are normally a lot faster and can be completed within a few hours.

International:

The process of transferring money between two parties that are located in different countries. They can take up to 4 days to complete, depending on each country’s regulations.

How do wire transfers work?

Typically, a wire transfer takes place between two banks or financial institutions. The participating institutions would exchange information about the recipient, the amount transferred, and other related information. The sender prepays the transaction at their bank and provides information about the receiver.

The wire transfer can begin once the information has been documented. The sender’s bank sends a message with payment instructions to the receiver’s bank. This is done through a secure system such as SWIFT. Once the information is received, the receiver’s bank deposits its reserve funds into the appropriate account.

After the money is deposited, the two banks/institutions settle the payment on the back end.

Information Required for a Wire Transfer:

For this type of money transfer, the sender will need to provide information about the receiver that includes: 

  • The receiver’s name.
  • The receiver’s address.
  • The receiver’s bank account type.
  • The receiver’s bank name.
  • The receiver’s bank address.
  • The receiver’s bank account number or IBAN.
  • For international wire transfers: the receiver bank’s SWIFT code.

What is SWIFT?

To keep the transferred money in order; banks work in a unified system. This is possible with the help of SWIFT (The Society for Worldwide Interbank Financial Telecommunication). SWIFT is a money-transferring program employed internationally. This means that many banks around the world transfer money in a similar process.

This decreases errors and complications. Having a united system also helps international banks to communicate easily. The easier the banks communicate; the faster the money would transfer.

What is a Telegraphic Transfer?

Simply put, a Telegraphic Transfer (TT) is an electronic form of money transfer. For the most part, TT is used for international transactions. This means it is very similar to “International Wire Transfers” which has been explained above.

How do TTs differ from Wire Transfers?

There is not much of a difference between TTs and wire transfers. Since TTs are mostly used for international money transfers, their mechanism is similar to international wire transfers.

Similarities:

  • Telegraphic Transfers are conducted under the SWIFT system.
  • TTs and International wire transfers take around 2 to 4 days.
  • They are both safe.
  • They both have fees.
  • They both require the same information.

Differences:

Generally, the only difference between WT and TTs is the conducting party.

While wire transfers can be made by financial institutions, most TTs are difficult to arrange without bank accounts.

What are the fees of a money transfer?

An electronic money transfer can result in fees for both the receiver and the sender. The fee amount ranges between 25$ and 50$ for the sender. The receiver’s transfer fees could range between 10$ and 25$.

How is the money transfer fee calculated?

The costs depend on two factors:

  1. The amount of money transferred from the sender to the receiver.
  2. Whether the money transfer process is arranged domestically or internationally.

Is there an exception for money transfer fees?

Yes, some banks can overlook money transfer fees if:

  1. The amount of money transferred is small.
  2. The money transfer process is domestic.
  3. The sender’s and receiver’s banks have commercial relations together.

Perks of paying with telegraphic transfers , and wire transfers:

  1. Fast Payment:

Telegraphic transfers are one of the fastest methods of international payments. Telegraphic transfers may take 1 to 3 days to complete.

  1. Safety:

Having international banks work in a unified system (SWIFT) enhances the tracking process. Money transferred through wire transfers/TT is arranged only between connected banks. This  means that both the receiver’s and sender’s information are recorded.

What to consider when paying suppliers with cash?

Running a business in cash payments requires an effective accounting system. Part of this is achieved by keeping track of all payments made. Documenting every amount will help business owners to stay on budget.

Cash payments’ s downfall is the lack of automatic reports. So, it is best to consider:

Having a form of evidence that would confirm payments. This can be a receipt, a contract, or any other medium. It is suggested that this evidential piece includes the following:

  • The buyer’s and seller’s information.
  • Buyer’s name.
  • Seller’s name.
  • Product(s) name.
  • Product(s) Description.
  • Product(s) price.
  • The number of products bought.
  • Total costs.
  • Any additional tax or fees.
  • Date of purchase.
  • Any additional terms.
  • The buyer’s signature.
  • The seller’s signature.

The buyer and seller must own a copy of this agreement. This way, the cash payments will be recorded. These records will help buyers to avoid conflicts. They can also be used to archive the supplies.

The supplier can give you more details about the payment methods. Some suppliers could include specific terms. The important thing here is that telegraphic transfers are considered safe payment methods. Paying with cash is also a good option if it is recorded. Completing money transfers through wire transfer, TT, or SWIFT, all mean the same thing. They all stand for an electronic form of money transfer through banks. 



Related Posts





Menu