Wire transfer, also known as telegraphic transfer or TT, is a method of transferring funds between banks that no longer involves the telegraph but still uses a secure wired network. It was originally used to send money from one bank to another anywhere in the world and is still commonly used today.
Wire transfer is a means of transferring funds from one place to another. Originally, this process used the telegraph as a means to transfer money between a point of origin and a point of termination. Today, the process of transferring money between two parties no longer involves the telegraph, but the use of the term is still common in a number of countries.
Sometimes referred to as Telex Transfer or simply TT, telegraphic transfer has long been a means of communication between banking institutions. In days gone by, wire transfer could be used to send money from an account at a bank to an account at a bank located anywhere else in the world. In general, there were fees associated with making a transfer, with the sender and recipient paying a small fee for the transaction.
In the 20th century, individuals could also make use of a wire transfer to move entire fund balances from one bank to another. For example, a person who lives in New York City can take a job located in Los Angeles. Rather than withdraw funds from existing bank accounts and physically transport the funds across the country, the individual would establish new accounts in Los Angeles and then authorize the two banks involved to transfer all funds to the new accounts. At that time, the accounts at the New York bank would be closed.
The proliferation of national and international banking concerns has made the use of wire transfer obsolete in some cases. However, the general concept of transferring funds quickly and securely from one bank to another is still common practice. Many companies pay providers by transferring money directly from a trading account to the provider’s account. As in the past, many banks around the world still use a secure wired network to make these transfers. Thus, the essential principle of telegraphic transfer is still functional today, just with different technologies employed to accomplish the task.
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