# Transfer Fees

The `TransferRate` setting in the XRP Ledger allows [financial institutions that issue currency in the XRP Ledger](become-an-xrp-ledger-gateway.html) to charge users a _transfer fee_ for sending the currencies issued by that financial institution. The sender of the transfer is debited an extra percentage based on the transfer fee, while the recipient of the transfer is credited the intended amount. The difference is the transfer fee, which becomes the property of the issuing address, and is no longer tracked in the XRP Ledger. The transfer fee does not apply when sending or receiving _directly_ to and from the issuing account, but it does apply when transferring from an [operational address][] to another user.

[operational address]: issuing-and-operational-addresses.html
[issuing address]: issuing-and-operational-addresses.html

XRP never has a transfer fee, because it never has an issuer.

For example, ACME Bank might set the transfer fee to 0.5% for ACME issuances. For the recipient of a payment to get 2 EUR.ACME, the sender must send 2.01 EUR.ACME. After the transaction, ACME's outstanding obligations in the XRP Ledger have decreased by 0.01€, which means that ACME no longer needs to hold that amount in the account backing its XRP Ledger issuances.

The following diagram shows an XRP Ledger payment of 2 EUR.ACME from Alice to Charlie with a transfer fee of 1%:

![Alice sends 2,02€, Charlie receives 2,00€, and ACME owes 0,02€ less in the XRP Ledger](img/e2g-with_transferrate.png)

## Transfer Fees in Payment Paths

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A transfer fee applies whenever an individual transfer would shift issuances from one party to another through the issuing account. In more complex transactions, this can occur multiple times. Transfer fees apply starting from the end and working backwards, so that ultimately the sender of a payment must send enough to account for all fees. For example:

![Diagram of cross-currency payment with transfer fees](img/transfer_fees_example.png)

In this scenario, Salazar (the sender) holds EUR issued by ACME, and wants to deliver 100 USD issued by WayGate to Rosa (the recipient). FXMaker is a currency trader with the best offer in the order book, at a rate of 1 USD.WayGate for every 0.9 EUR.ACME. If there were no transfer fees, Salazar could deliver 100 USD to Rosa by sending 90 EUR. However, ACME has a transfer fee of 1% and WayGate has a transfer fee of 0.2%. This means:

* FXMaker must send 100.20 USD.WayGate for Rosa to receive 100 USD.WayGate.
* FXMaker's current ask is 90.18 EUR.ACME to send 100.20 USD.WayGate.
* For FXMaker to receive 90.18 EUR.ACME, Salazar must send 91.0818 EUR.ACME.

# Technical Details

The transfer fee is represented by a setting on the [issuing address][]. The transfer fee cannot be less than 0% or more than 100% and is rounded down to the nearest 0.0000001%. The TransferRate setting applies to all currencies issued by the same account. If you want to have different transfer fee percentages for different currencies, use different [issuing addresses][issuing address] for each currency.

**Note:** The [fix1201 amendment](amendments.html), introduced in `rippled` v0.80.0 and enabled on 2017-11-14, lowered the maximum transfer fee to 100% from an effective limit of approximately 329% (based on the maximum size of a 32-bit integer). The ledger may still contain accounts with a transfer fee setting higher than 100% (a `TransferRate` of `2000000000`). Any transfer fees already set continue to operate at their stated rate.

## RippleAPI

In RippleAPI, the transfer fee is specified in the `transferRate` field, as a decimal which represents the amount you must send for the recipient to get 1 unit of the same currency. A `transferRate` of `1.005` is equivalent to a transfer fee of 0.5%. By default, the `transferRate` is set to no fee. The value of `transferRate` cannot be less than `1.0` or more than `2.0`. The transfer rate is rounded to 10 significant digits including the ones digit. The value `null` is a special case for no fee, equivalent to `1.0`.

A financial institution can send a [Settings transaction](rippleapi-reference.html#settings) from its [issuing address][] to change the `transferRate` for its issuances.

You can check an account's `transferRate` with the [getSettings method](rippleapi-reference.html#getsettings).

## rippled

In `rippled`'s JSON-RPC and WebSocket APIs, the transfer fee is specified in the `TransferRate` field, as an integer which represents the amount you must send for the recipient to get 1 billion units of the same currency. A `TransferRate` of `1005000000` is equivalent to a transfer fee of 0.5%. By default, the `TransferRate` is set to no fee. The value of `TransferRate` cannot be set to less than `1000000000` ("0%" fee) or more than `2000000000` (a "100%" fee). The value `0` is special case for no fee, equivalent to `1000000000`.

A financial institution can submit an [AccountSet transaction][] from its [issuing address][] to change the `TransferRate` for its issuances.

You can check an account's `TransferRate` with the [account_info method][]. If the `TransferRate` is omitted, then that indicates no fee.

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