diff --git a/protocol-units/bridge/contracts/src/AtomicBridgeInitiatorMOVE.sol b/protocol-units/bridge/contracts/src/AtomicBridgeInitiatorMOVE.sol
index 3bff65592..09c0db80d 100644
--- a/protocol-units/bridge/contracts/src/AtomicBridgeInitiatorMOVE.sol
+++ b/protocol-units/bridge/contracts/src/AtomicBridgeInitiatorMOVE.sol
@@ -34,6 +34,8 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
     ERC20Upgradeable public moveToken;
     uint256 private nonce;
 
+    uint256 public sponsoredTransferFee;
+
     // Configurable time lock duration
     uint256 public initiatorTimeLockDuration;
 
@@ -42,7 +44,8 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
         address _moveToken,
         address owner,
         uint256 _timeLockDuration,
-        uint256 _initialPoolBalance
+        uint256 _initialPoolBalance,
+        uint256 _sponsoredTransferFee
     ) public initializer {
         require(_moveToken != address(0) && owner != address(0), "ZeroAddress");
         moveToken = ERC20Upgradeable(_moveToken);
@@ -53,6 +56,10 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
 
         // Set the initial pool balance
         poolBalance = _initialPoolBalance;
+
+        // Set the sponsored transfer fee
+        sponsoredTransferFee = _sponsoredTransferFee;
+
     }
 
     function setCounterpartyAddress(address _counterpartyAddress) external onlyOwner {
@@ -65,6 +72,10 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
         rateLimiter = RateLimiter(_rateLimiter);
     }
 
+    function setSponsoredTransferFee(uint256 _sponsoredTransferFee) external onlyOwner {
+        sponsoredTransferFee = _sponsoredTransferFee;
+    }
+
     function initiateBridgeTransfer(uint256 moveAmount, bytes32 recipient, bytes32 hashLock)
         external
         returns (bytes32 bridgeTransferId)
@@ -72,12 +83,8 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
         rateLimiter.rateLimitOutbound(moveAmount);
         address originator = msg.sender;
             
-        require(moveAmount > 0, "ZeroAmount");
+        require(moveAmount > sponsoredTransferFee, "INSUFFICIENT_AMOUNT");
 
-        // Ensure there is a valid amount
-        if (moveAmount == 0) {
-            revert ZeroAmount();
-        }
 
         // Transfer the MOVE tokens from the user to the contract
         if (!moveToken.transferFrom(originator, address(this), moveAmount)) {
@@ -87,11 +94,13 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
         // Update the pool balance
         poolBalance += moveAmount;
 
+        uint256 amount = moveAmount - sponsoredTransferFee; // deduct the sponsored transfer fee
+
         // Generate a unique nonce to prevent replay attacks, and generate a transfer ID
         bridgeTransferId = keccak256(abi.encodePacked(originator, recipient, hashLock, initiatorTimeLockDuration, block.timestamp, nonce++));
 
         bridgeTransfers[bridgeTransferId] = BridgeTransfer({
-            amount: moveAmount,
+            amount: amount,
             originator: originator,
             recipient: recipient,
             hashLock: hashLock,
@@ -99,7 +108,7 @@ contract AtomicBridgeInitiatorMOVE is IAtomicBridgeInitiatorMOVE, OwnableUpgrade
             state: MessageState.INITIALIZED
         });
 
-        emit BridgeTransferInitiated(bridgeTransferId, originator, recipient, moveAmount, hashLock, initiatorTimeLockDuration);
+        emit BridgeTransferInitiated(bridgeTransferId, originator, recipient, amount, hashLock, initiatorTimeLockDuration);
         return bridgeTransferId;
     }
 
diff --git a/protocol-units/bridge/contracts/test/AtomicBridgeCounterpartyMOVE.t.sol b/protocol-units/bridge/contracts/test/AtomicBridgeCounterpartyMOVE.t.sol
index 91cbe7e17..be3f3c2a3 100644
--- a/protocol-units/bridge/contracts/test/AtomicBridgeCounterpartyMOVE.t.sol
+++ b/protocol-units/bridge/contracts/test/AtomicBridgeCounterpartyMOVE.t.sol
@@ -28,6 +28,7 @@ contract AtomicBridgeCounterpartyMOVETest is Test {
     uint256 public amount = 100 * 10 ** 8; // 100 MOVEToken (assuming 8 decimals)
     uint256 public timeLock = 100;
     bytes32 public initiator = keccak256(abi.encodePacked(deployer));
+    uint256 public constant sponsoredTransferFee = 1;
     bytes32 public bridgeTransferId =
         keccak256(abi.encodePacked(block.timestamp, initiator, recipient, amount, hashLock, timeLock));
 
@@ -53,11 +54,12 @@ contract AtomicBridgeCounterpartyMOVETest is Test {
             address(atomicBridgeInitiatorMOVEImplementation),
             address(deployer),
             abi.encodeWithSignature(
-                "initialize(address,address,uint256,uint256)",
+                "initialize(address,address,uint256,uint256,uint256)",
                 address(moveToken),
                 deployer,
                 initiatorTimeLockDuration,
-                0 ether // Initial pool balance
+                0 ether, // Initial pool balance
+                sponsoredTransferFee
             )
         );
         atomicBridgeInitiatorMOVE = AtomicBridgeInitiatorMOVE(address(proxy));
diff --git a/protocol-units/bridge/contracts/test/AtomicBridgeInitiatorMOVE.t.sol b/protocol-units/bridge/contracts/test/AtomicBridgeInitiatorMOVE.t.sol
index 4da72b316..45c370cde 100644
--- a/protocol-units/bridge/contracts/test/AtomicBridgeInitiatorMOVE.t.sol
+++ b/protocol-units/bridge/contracts/test/AtomicBridgeInitiatorMOVE.t.sol
@@ -24,6 +24,7 @@ contract AtomicBridgeInitiatorMOVETest is Test {
     bytes32 public hashLock = keccak256(abi.encodePacked("secret"));
     uint256 public amount = 1 ether;
     uint256 public constant timeLockDuration = 48 * 60 * 60; // 48 hours in seconds
+    uint256 public constant sponsoredTransferFee = 1;
 
     function setUp() public {
         // Deploy the MOVEToken contract and mint some tokens to the deployer
@@ -40,11 +41,12 @@ contract AtomicBridgeInitiatorMOVETest is Test {
             address(atomicBridgeInitiatorImplementation),
             address(proxyAdmin),
             abi.encodeWithSignature(
-                "initialize(address,address,uint256,uint256)", 
+                "initialize(address,address,uint256,uint256,uint256)", 
                 address(moveToken), 
                 address(this), 
                 timeLockDuration,
-                0 ether
+                0 ether,
+                sponsoredTransferFee
             )
         );
 
@@ -96,7 +98,7 @@ contract AtomicBridgeInitiatorMOVETest is Test {
             AtomicBridgeInitiatorMOVE.MessageState transferState
         ) = atomicBridgeInitiatorMOVE.bridgeTransfers(bridgeTransferId);
 
-        assertEq(transferAmount, moveAmount);
+        assertEq(transferAmount, moveAmount - sponsoredTransferFee);
         assertEq(transferOriginator, originator);
         assertEq(transferRecipient, recipient);
         assertEq(transferHashLock, hashLock);
@@ -143,7 +145,7 @@ contract AtomicBridgeInitiatorMOVETest is Test {
             AtomicBridgeInitiatorMOVE.MessageState completedState
         ) = atomicBridgeInitiatorMOVE.bridgeTransfers(bridgeTransferId);
 
-        assertEq(completedAmount, moveAmount);
+        assertEq(completedAmount, moveAmount - sponsoredTransferFee);
         assertEq(completedOriginator, originator);
         assertEq(completedRecipient, recipient);
         assertEq(completedHashLock, testHashLock);
@@ -189,7 +191,7 @@ contract AtomicBridgeInitiatorMOVETest is Test {
 
         // Verify that the originator receives the refund and the balance is restored
         uint256 finalBalance = moveToken.balanceOf(originator);
-        assertEq(finalBalance, initialBalance, "MOVE balance mismatch");
+        assertEq(finalBalance, initialBalance - sponsoredTransferFee, "MOVE balance mismatch");
     }
 }