diff --git a/app/keepers/keepers.go b/app/keepers/keepers.go
index ddcfd9bb..334e16d0 100644
--- a/app/keepers/keepers.go
+++ b/app/keepers/keepers.go
@@ -304,7 +304,7 @@ func (appKeepers *AppKeepers) InitNormalKeepers(
 		appKeepers.GetSubspace(transfermiddlewaretypes.ModuleName),
 		appCodec,
 		&appKeepers.RatelimitKeeper,
-		&appKeepers.TransferKeeper.Keeper,
+		&appKeepers.TransferKeeper,
 		appKeepers.BankKeeper,
 		authorityAddress,
 	)
@@ -319,7 +319,7 @@ func (appKeepers *AppKeepers) InitNormalKeepers(
 		appCodec,
 		appKeepers.keys[routertypes.StoreKey],
 		appKeepers.GetSubspace(routertypes.ModuleName),
-		appKeepers.TransferKeeper.Keeper,
+		appKeepers.TransferKeeper,
 		appKeepers.IBCKeeper.ChannelKeeper,
 		&appKeepers.DistrKeeper,
 		appKeepers.BankKeeper,
@@ -337,6 +337,7 @@ func (appKeepers *AppKeepers) InitNormalKeepers(
 		appKeepers.BankKeeper,
 		appKeepers.ScopedTransferKeeper,
 		&appKeepers.IbcTransferMiddlewareKeeper,
+		&appKeepers.BankKeeper,
 	)
 
 	appKeepers.RouterKeeper.SetTransferKeeper(appKeepers.TransferKeeper)
@@ -408,7 +409,7 @@ func (appKeepers *AppKeepers) InitNormalKeepers(
 		appKeepers.IBCKeeper.ChannelKeeper,
 		&appKeepers.IBCKeeper.PortKeeper,
 		appKeepers.ScopedWasmKeeper,
-		appKeepers.TransferKeeper.Keeper,
+		appKeepers.TransferKeeper,
 		bApp.MsgServiceRouter(),
 		bApp.GRPCQueryRouter(),
 		wasmDir,
diff --git a/custom/ibc-transfer/keeper/keeper.go b/custom/ibc-transfer/keeper/keeper.go
index cc4bc677..4d1fdcbc 100644
--- a/custom/ibc-transfer/keeper/keeper.go
+++ b/custom/ibc-transfer/keeper/keeper.go
@@ -1,14 +1,20 @@
 package keeper
 
 import (
+	"context"
+	"fmt"
+	"time"
+
 	"github.com/cosmos/cosmos-sdk/codec"
 	ibctransferkeeper "github.com/cosmos/ibc-go/v7/modules/apps/transfer/keeper"
 
 	storetypes "github.com/cosmos/cosmos-sdk/store/types"
+	sdk "github.com/cosmos/cosmos-sdk/types"
 	paramtypes "github.com/cosmos/cosmos-sdk/x/params/types"
 	"github.com/cosmos/ibc-go/v7/modules/apps/transfer/types"
 	porttypes "github.com/cosmos/ibc-go/v7/modules/core/05-port/types"
 	"github.com/cosmos/ibc-go/v7/modules/core/exported"
+	custombankkeeper "github.com/notional-labs/composable/v6/custom/bank/keeper"
 	ibctransfermiddleware "github.com/notional-labs/composable/v6/x/ibctransfermiddleware/keeper"
 )
 
@@ -16,6 +22,7 @@ type Keeper struct {
 	ibctransferkeeper.Keeper
 	cdc                   codec.BinaryCodec
 	IbcTransfermiddleware *ibctransfermiddleware.Keeper
+	bank                  *custombankkeeper.Keeper
 }
 
 func NewKeeper(
@@ -29,11 +36,83 @@ func NewKeeper(
 	bk types.BankKeeper,
 	scopedKeeper exported.ScopedKeeper,
 	ibcTransfermiddleware *ibctransfermiddleware.Keeper,
+	bankKeeper *custombankkeeper.Keeper,
 ) Keeper {
 	keeper := Keeper{
 		Keeper:                ibctransferkeeper.NewKeeper(cdc, key, paramSpace, ics4Wrapper, channelKeeper, portKeeper, authKeeper, bk, scopedKeeper),
 		IbcTransfermiddleware: ibcTransfermiddleware,
 		cdc:                   cdc,
+		bank:                  bankKeeper,
 	}
 	return keeper
 }
+
+// Transfer is the server API around the Transfer method of the IBC transfer module.
+// It checks if the sender is allowed to transfer the token and if the channel has fees.
+// If the channel has fees, it will charge the sender and send the fees to the fee address.
+// If the sender is not allowed to transfer the token because this tokens does not exists in the allowed tokens list, it just return without doing anything.
+// If the sender is allowed to transfer the token, it will call the original transfer method.
+// If the transfer amount is less than the minimum fee, it will charge the full transfer amount.
+// If the transfer amount is greater than the minimum fee, it will charge the minimum fee and the percentage fee.
+func (k Keeper) Transfer(goCtx context.Context, msg *types.MsgTransfer) (*types.MsgTransferResponse, error) {
+	ctx := sdk.UnwrapSDKContext(goCtx)
+	params := k.IbcTransfermiddleware.GetParams(ctx)
+	if params.ChannelFees != nil && len(params.ChannelFees) > 0 {
+		channelFee := findChannelParams(params.ChannelFees, msg.SourceChannel)
+		if channelFee != nil {
+			if channelFee.MinTimeoutTimestamp > 0 {
+
+				goCtx := sdk.UnwrapSDKContext(goCtx)
+				blockTime := goCtx.BlockTime()
+
+				timeoutTimeInFuture := time.Unix(0, int64(msg.TimeoutTimestamp))
+				if timeoutTimeInFuture.Before(blockTime) {
+					return nil, fmt.Errorf("incorrect timeout timestamp found during ibc transfer. timeout timestamp is in the past")
+				}
+
+				difference := timeoutTimeInFuture.Sub(blockTime).Nanoseconds()
+				if difference < channelFee.MinTimeoutTimestamp {
+					return nil, fmt.Errorf("incorrect timeout timestamp found during ibc transfer. too soon")
+				}
+			}
+			coin := findCoinByDenom(channelFee.AllowedTokens, msg.Token.Denom)
+			if coin == nil {
+				return nil, fmt.Errorf("token not allowed to be transferred in this channel")
+			}
+			minFee := coin.MinFee.Amount
+			charge := minFee
+			if charge.GT(msg.Token.Amount) {
+				charge = msg.Token.Amount
+			}
+
+			newAmount := msg.Token.Amount.Sub(charge)
+
+			if newAmount.IsPositive() {
+				percentageCharge := newAmount.QuoRaw(coin.Percentage)
+				newAmount = newAmount.Sub(percentageCharge)
+				charge = charge.Add(percentageCharge)
+			}
+
+			msgSender, err := sdk.AccAddressFromBech32(msg.Sender)
+			if err != nil {
+				return nil, err
+			}
+
+			feeAddress, err := sdk.AccAddressFromBech32(channelFee.FeeAddress)
+			if err != nil {
+				return nil, err
+			}
+
+			send_err := k.bank.SendCoins(ctx, msgSender, feeAddress, sdk.NewCoins(sdk.NewCoin(msg.Token.Denom, charge)))
+			if send_err != nil {
+				return nil, send_err
+			}
+
+			if newAmount.LTE(sdk.ZeroInt()) {
+				return &types.MsgTransferResponse{}, nil
+			}
+			msg.Token.Amount = newAmount
+		}
+	}
+	return k.Keeper.Transfer(goCtx, msg)
+}