diff --git a/modules/apps/29-fee/transfer_test.go b/modules/apps/29-fee/transfer_test.go
new file mode 100644
index 00000000000..863b728d45f
--- /dev/null
+++ b/modules/apps/29-fee/transfer_test.go
@@ -0,0 +1,72 @@
+package fee_test
+
+import (
+	sdk "github.com/cosmos/cosmos-sdk/types"
+
+	"github.com/cosmos/ibc-go/v3/modules/apps/29-fee/types"
+	transfertypes "github.com/cosmos/ibc-go/v3/modules/apps/transfer/types"
+	clienttypes "github.com/cosmos/ibc-go/v3/modules/core/02-client/types"
+	ibctesting "github.com/cosmos/ibc-go/v3/testing"
+)
+
+// Integration test to ensure ics29 works with ics20
+func (suite *FeeTestSuite) TestFeeTransfer() {
+	path := ibctesting.NewPath(suite.chainA, suite.chainB)
+	feeTransferVersion := string(types.ModuleCdc.MustMarshalJSON(&types.Metadata{FeeVersion: types.Version, AppVersion: transfertypes.Version}))
+	path.EndpointA.ChannelConfig.Version = feeTransferVersion
+	path.EndpointB.ChannelConfig.Version = feeTransferVersion
+	path.EndpointA.ChannelConfig.PortID = transfertypes.PortID
+	path.EndpointB.ChannelConfig.PortID = transfertypes.PortID
+
+	suite.coordinator.Setup(path)
+
+	// set up coin & ics20 packet
+	coin := ibctesting.TestCoin
+	fee := types.Fee{
+		RecvFee:    validCoins,
+		AckFee:     validCoins2,
+		TimeoutFee: validCoins3,
+	}
+
+	msgs := []sdk.Msg{
+		types.NewMsgPayPacketFee(fee, path.EndpointA.ChannelConfig.PortID, path.EndpointA.ChannelID, suite.chainA.SenderAccount.GetAddress().String(), nil),
+		transfertypes.NewMsgTransfer(path.EndpointA.ChannelConfig.PortID, path.EndpointA.ChannelID, coin, suite.chainA.SenderAccount.GetAddress().String(), suite.chainB.SenderAccount.GetAddress().String(), clienttypes.NewHeight(0, 100), 0),
+	}
+	res, err := suite.chainA.SendMsgs(msgs...)
+	suite.Require().NoError(err) // message committed
+
+	// after incentivizing the packets
+	originalChainASenderAccountBalance := sdk.NewCoins(suite.chainA.GetSimApp().BankKeeper.GetBalance(suite.chainA.GetContext(), suite.chainA.SenderAccount.GetAddress(), ibctesting.TestCoin.Denom))
+
+	packet, err := ibctesting.ParsePacketFromEvents(res.GetEvents())
+	suite.Require().NoError(err)
+
+	// register counterparty address on chainB
+	// relayerAddress is address of sender account on chainB, but we will use it on chainA
+	// to differentiate from the chainA.SenderAccount for checking successful relay payouts
+	relayerAddress := suite.chainB.SenderAccount.GetAddress()
+
+	msgRegister := types.NewMsgRegisterCounterpartyAddress(suite.chainB.SenderAccount.GetAddress().String(), relayerAddress.String())
+	_, err = suite.chainB.SendMsgs(msgRegister)
+	suite.Require().NoError(err) // message committed
+
+	// relay packet
+	err = path.RelayPacket(packet)
+	suite.Require().NoError(err) // relay committed
+
+	// ensure relayers got paid
+	// relayer for forward relay: chainB.SenderAccount
+	// relayer for reverse relay: chainA.SenderAccount
+
+	// check forward relay balance
+	suite.Require().Equal(
+		fee.RecvFee,
+		sdk.NewCoins(suite.chainA.GetSimApp().BankKeeper.GetBalance(suite.chainA.GetContext(), suite.chainB.SenderAccount.GetAddress(), ibctesting.TestCoin.Denom)),
+	)
+
+	suite.Require().Equal(
+		fee.AckFee.Add(fee.TimeoutFee...), // ack fee paid, timeout fee refunded
+		sdk.NewCoins(suite.chainA.GetSimApp().BankKeeper.GetBalance(suite.chainA.GetContext(), suite.chainA.SenderAccount.GetAddress(), ibctesting.TestCoin.Denom)).Sub(originalChainASenderAccountBalance),
+	)
+
+}